Author Question: Refer to Figure 4-6. What is the value of producer surplus after the imposition of the price floor? ... (Read 60 times)

TVarnum · **on:** Jun 29, 2018

Refer to Figure 4-6. What is the value of producer surplus after the imposition of the price floor?

A) 3,000 B) 3,600 C) 4,200 D) 4,500

Question 2

If incomes grow during the next year, what will happen in the market for RVs? (Assume that RVs are normal goods.)

What will be an ideal response?

frankwu0507 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

If RVs are normal, an increase in income will lead to an increase in demand. The demand curve will shift to the right. This will increase the equilibrium price of an RV and also increase the equilibrium quantity sold.