Consumer Surplus Graph With Price Floor

Price and quantity controls.

Consumer surplus graph with price floor.

Price floors are used by the government to prevent prices from being too low. Visual tutorial on calculating price floors and price ceilings. The consumer surplus formula is based on an economic theory of marginal utility. Price floors are also used often in agriculture to try to protect farmers.

How price controls reallocate surplus. The most common price floor is the minimum wage the minimum price that can be payed for labor. The somewhat triangular area labeled by f in the graph shows the area of consumer surplus which shows that the equilibrium price in the market was less than what many of the consumers were willing to pay. Price ceilings and price floors.

Economics microeconomics consumer and producer surplus market interventions. Minimum wage and price floors. A price floor is the lowest legal price a commodity can be sold at. This is the currently selected item.

The video shows the impact on both producer surplus and consumer surplus. The effect of government interventions on surplus.