Q: Define a Price Floor.
A: A minimum price at which goods or services are allowed to trade.
Q: If Demand is P=75-Q and Supply is P=-25+Q, find Producer Surplus.
A: First we must find the equilibrium price and quantity.
To do this set Supply and Demand equal.
75-Q=-25+Q or 100=2Q or Qe=50.
Plug this Q back into Supply or Demand and you find that Pe=75-50=25.
Now we need to see what shape PS has.
Since Supply crosses the quantity axis at a positive number, PS is not a triangle.
To find this number plug in a price of 0 into the Supply curve.
You should find the x-intercept is 25.
So PS=25*25+(1/2)*(50-25)25= $937.50