The market for a certain agricultural crop is represented in the diagram below. The market equilibrium price is £30 per tonne.
To support farmers, the government intervenes by introducing a minimum price (price floor) of £35 per tonne, and commits to purchasing any surplus production at this price.
What is the total expenditure by the government to buy up the surplus production?
£0.90 million
£1.05 million
£1.75 million
£2.80 million
