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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Another example of price interference is a price floor , in which lawmakers make it illegal to buy or sell a good or service below a certain price, which is above equilibrium
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3.13. Market Interference: The Negative Impact on Total Surplus
is surplus that is lost by one or the other group but not transferred to anyone. Thus, after the imposition of a price ceiling at P c , consumer surplus is given by a + c, producer surplus by e, and the deadweight loss is b + d.8 <span>Another example of price interference is a price floor , in which lawmakers make it illegal to buy or sell a good or service below a certain price, which is above equilibrium. Again, some sellers who are still able to sell at the now higher floor price benefit from the law, but that’s not the whole story. Exhibit 17 shows such a floor price, imposed at P f


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