producer surplus is X. (b) The original equilibrium is $8 at a quantity of 1,800. Consumer surplus is G + H + J, and

producer surplus is I + K. A price floor is imposed at $12, which means that quantity demanded falls to 1,400. As a

result, the new consumer surplus is G, and the new producer surplus is H + I.

Figure 3.24 (b) shows a price floor example using a string of struggling movie theaters, all in the same city. The

current equilibrium is $8 per movie ticket, with 1,800 people attending movies. The original consumer surplus

is G + H + J, and producer surplus is I + K. The city government is worried that movie theaters will go out of

business, reducing the entertainment options available to citizens, so it decides to impose a price floor of $12

per ticket. As a result, the quantity demanded of movie tickets falls to 1,400. The new consumer surplus is G,

and the new producer surplus is H + I. In effect, the price floor causes the area H to be transferred from
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