now suppose the government applies a price floor

pricefloor of p 3

p3. Compared with themarket-clearing equilibrium, consumer surplus would

A.

decrease

decrease by area B.

B.

increase by area C.

C.

decrease by areas Upper B and Upper E

decreasebyareasBandE.

D.

decrease

decrease by areas B and F.

E.

decrease by area E.

Inturn, producer surplus would

A.

increase by area B.

B.

increase

increase by areasB, E, and G.

C.

increase

increase by areas B and E.

D.

increase by area Upper B and decrease by area Upper F

increasebyareaBanddecreasebyareaF.

E.

decrease by area C.

Consequently, with the price floor

pricefloor, deadweight loss would equal

A.

areas E and F.

B.

no areas.

C.

areasB, C,E, and F.

D.

area F.

E.

area E.