Discuss why a society would want a binding price floor law on a commodity, such as corn.

Who would benefit? Who would suffer? If more suffering is caused by the presence of a price floor law, why does it remain in effect?

(a) Draw a graph, label all axes and curves properly, and identify the price floor. You may use actual numbers or letters to identify the quantities demanded and quantities supplied at the price floor.

(b) Draw the same graph, and identify consumer surplus, producer surplus, and deadweight loss.

(c) Discuss how consumer surplus changes with the imposition of the price floor. You must refer to your graph to provide an explanation.

(d) Discuss how producer surplus changes with the imposition of the price floor.You must refer to your graph to provide an explanation.