Industries at a comparative disadvantage may find it necessary to decrease their workforce.

Producer surplus is the area:

A price ceiling is a legally mandated _____ goods or services cannot be sold.

(Figure: Determining Surplus 4) In the market depicted in the graph, producer surplus equals _____.

Suppose that your car gets 40 miles to the gallon. Assuming D = distance or number of miles your car can drive and that G = the number of gallons of gasoline in your fuel tank, the relationship between the number of miles your car can drive and the amount of gas in your fuel tank is captured by which equation?

Suppose that a customer’s willingness to pay for a product is $1,480, and the seller’s willingness to sell is $1,210. If the negotiated price is $1,479, what is the producer surplus?

Stylized models simplify information and facts to their basic relevant elements.

Which situation(s) may require government intervention? I. A local business has made a profit in each of the last 10 years. II. Students are having difficulty deciding whether to go to the beach or hiking for their class trip. III. A manufacturing firm on a river is dumping production run-off into the water.

(Figure: Understanding Price Ceilings and Floors) In the market depicted in the graph, if the government sets a price of $25, there is a surplus of 600 units.

Suppose an effective price floor is imposed in a market, leading to the development of an illegal black market for the product. How would the price in the black market compare to the price of the product in the legal market, which has an effective price floor?