Calculate effects of price floor
Syllabus: Calculate possible effects from the price floor diagram, including
- the resulting surplus,
- the change in consumer expenditure,
- the change in producer revenue, and
- government expenditure to purchase the surplus.
For higher level, you need to be able to use a price floor diagram to be able to calculate changes in consumer expenditure, firm's revenue and the cost to the government of buying any surplus. The presentation below goes through this. Click on the screenshot or link below to open the presentation. It will open in a new web window. You will need a headset or speakers to listen to the explanation.