Focus on calculating the consumer surplus, producer surplus, and total surplus both before a price floor is established and after a price, the floor is enacted.
In a perfectly competitive market, the equilibrium price and quantity represent the most efficient operation of that market. Optimum efficiency means that 1) sellers cannot be made better off without, at the same time, making buyers worse off, and 2) that buyers cannot be made better off, without making the sellers worse off. This assignment […]