Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P, QS = 2P. a) Find the current equilibrium price and quantity. b) What is the total producer surplus if the market is in equilibrium?   The government is considering a minimum price policy to increase producer surplus. c) Explain by means of graphs how the introduction of a price floor can increase producer surplus. d) Find the (optimal) price floor that maximizes producer surplus.

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