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Quantitative Analysis of Price Ceilings and Floors: Finding Areas
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Quantitative Analysis of Price Ceilings and Floors: Finding Areas
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5. Consumer and Producer Surplus; Price Ceilings and Price Floors / Quantitative Analysis of Price Ceilings and Floors: Finding Areas / Problem 3
Problem 3
What happens to producer surplus when a price floor is set above the equilibrium price?
A
Producer surplus remains unchanged.
B
Producer surplus increases.
C
Producer surplus becomes negative.
D
Producer surplus decreases.
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