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To maintain a price P,above the market-clearing price Po,the government buys a quantity Q.The gain to producers is A B+D. The loss to consumers is A+B.The cost to the government is the rectangle,the area of which is P.(Q2-Q). Thus the total change in welfare is ACS+APS-Cost to Govt.=-(A+B)+A+B+D-Ps(Q2-Q1)=D-Ps (Q2-Qi) Society as a whole is worse off.To maintain a price Psabove the market-clearing price P0 , the government buys a quantity Qg . The gain to producers is A + B + D. The loss to consumers is A + B. The cost to the government is the rectangle, the area of which is Ps (Q2 – Q1 ). Thus the total change in welfare is △CS + △PS – Cost to Govt. = - (A + B) + A + B + D - Ps (Q2 – Q1 ) = D - Ps (Q2 – Q1 ) Society as a whole is worse off
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