Problem
Suppose that the government sets a price floor for milk that is above the competitive equilibrium price and that the government does not purchase any surplus milk.
a. Draw a graph showing this situation. Be sure your graph shows the competitive equilibrium price, the price floor, the quantity that would be sold in competitive equilibrium, and the quantity that would be sold with the price floor.
b. Compare the economic surplus in this market when there is a price floor and when there is not.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.