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Suppose that the government sets a price floor for milk that is above the competitive equilibrium price.
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 the competitive equilibrium and quantity that would be sold with the price floor.
b) Compare the economic surplus in this market when there is no price floor and when trehe is a price floor.
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on their own firms have little incentive to invest in pollution abating technologies such assmokestack filters a
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