Question
If the government provides a price support (i.e. a price floor with a promise to purchase any excess supply) to the producer of a good
If the government provides a price support (i.e. a price floor with a promise to purchase any excess supply) to the producer of a good then
a)production will increase, producer surplus will decrease, and consumer surplus will increase.
b)production will decrease, producer surplus will decrease, and consumer surplus will increase.
c)production will decrease, producer surplus will decrease, and consumer surplus will decrease.
d)production will increase, producer surplus will increase, and consumer surplus will decrease.
e)production will increase, producer surplus will increase, and consumer surplus will increase.
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