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Tell Com 13. How do U.S. business owners change the behavior when the minimum wage rises? H does this impact teenagers?

31. In the market depicted in the figure, there is either a price ceiling or a price floor- surprisingly, it doesnt matter w

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Answer #1

The graph represents dead weight loss and consumer/ producer surplus. Let start by defining what each of them are.

Dead weight loss is the loss in the value of transactions due to the imposing of a feature such as taxes, price ceiling or price floor, it shows the value of the transactions lost due to the imposing of such features.

Consumer surplus is the sum of the benefit attained by the consumer due to the imposing of the price floor or ceiling whereas producer surplus is the benefit attainted by the producer due to the imposing of the price floor or ceiling.

The graph attached above depicts dead weight loss which means deals that do not get made as Triangle B.

The deals which do get made are consumer and producer surplus which is depicted by rectangle A.

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