Suppose that the demand function for pizzas is Qd = 65,800 - 1,200P. The supply function is

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Suppose that the demand function for pizzas is Qd = 65,800 - 1,200P. The supply function is Qs = 4,000P - 20,000. Suppose the pizza parlor industry is effective at lobbying the government, which institutes a price floor of $15 on pizzas. Assuming that the least-cost pizza producers are the ones to produce the demanded pizzas, what is the effect on the aggregate, consumer, and producer surpluses? What if instead the government raised the price to $15 using a price support program?
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Microeconomics

ISBN: 978-1118572276

5th edition

Authors: David Besanko, Ronald Braeutigam

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