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A-Level Economics · Minimum price diagram question

With the floor in place, which area is PRODUCER SURPLUS on the units actually sold?

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The answer

The area H F B O. Above S, below £7, out to the 3 units sold: HFBO. (A* caveat: only on units that SELL — the 4 unsold units earn nothing unless the government buys the surplus, as the CAP did.) On the 3 traded units producers receive £7: PS = HFBO, above S up to the floor. The unsold 4 units earn nothing — that caveat is the evaluation.

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This is one of 6 questions on the minimum price diagram — every corner lettered, every wrong answer diagnosed.

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