do producers tend to favor price floors or price ceilings? why? producers favor a. price ceilings because…

do producers tend to favor price floors or price ceilings? why? producers favor a. price ceilings because, when binding, price ceilings increase price above the equilibrium and may increase producer surplus. b. price floors because, when binding, price floors decrease price below the equilibrium and increase producer surplus. c. price floors because, when binding, price floors increase price above the equilibrium and may increase producer surplus. d. price floors because, when binding, price floors increase price above the equilibrium and decrease deadweight loss. e. price floors because, when non - binding, price floors increase price above the equilibrium and may increase producer surplus.

do producers tend to favor price floors or price ceilings? why? producers favor a. price ceilings because, when binding, price ceilings increase price above the equilibrium and may increase producer surplus. b. price floors because, when binding, price floors decrease price below the equilibrium and increase producer surplus. c. price floors because, when binding, price floors increase price above the equilibrium and may increase producer surplus. d. price floors because, when binding, price floors increase price above the equilibrium and decrease deadweight loss. e. price floors because, when non - binding, price floors increase price above the equilibrium and may increase producer surplus.

Answer

Brief Explanations:

A price - floor is a legal minimum price. When binding, it is set above the equilibrium price. Producers benefit as they can sell at a higher price, which may increase producer surplus. A price - ceiling is a legal maximum price, usually set below the equilibrium price, which reduces the price producers can receive and thus producer surplus. Deadweight loss is not the main reason producers favor price - floors; the key is the potential increase in producer surplus from a higher price. Non - binding price - floors have no effect as the market price is already above the non - binding floor.

Answer:

C. price floors because, when binding, price floors increase price above the equilibrium and may increase producer surplus.