Illustrating A Binding Price Floor At P1 The

For example if the equilibrium price for rent was 100 per month and the government set the price ceiling of 80 then this would be called a binding price ceiling because it would force landlords to lower their price from. A price floor example. In the diagram to the right illustrating a binding price floor at p1 the amount of consumer surplus transferred to producers is represented by area and the deadweight loss is equal to areas.

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