Figure 7-14
-Refer to Figure 7-14.If the government imposes a price ceiling of $50 in this market,then producer surplus will decrease by
A)$325.
B)$100.
C)$300.
D)$200.

Question

Figure 7-14 
-Refer to Figure 7-14.If the government imposes a price ceiling of $50 in this market,then producer surplus will decrease by
A)$325. 
B)$100. 
C)$300. 
D)$200.

Quizplus · Accepted Answer

A price ceiling of $50 will reduce the price producers receive, leading to a decrease in producer surplus. The decrease in producer surplus is calculated based on the difference between the original equilibrium price and the new price ceiling, multiplied by the quantity sold at the new price.

Figure 7-14 -Refer to Figure 7-14.If the Government Imposes a Price Ceiling