i) Farmers complain that the price floor has reduced their total revenue. Is this possible? Explain.
Yes it is possible when the demand is elastic (Ed>1). An increase in price of the cheese will decrease the total revenue because an increase in the price will have a huge impact on the quantity demanded of cheese. In other words it can be said that the percentage change in the quantity demanded of cheese will be much greater than the percentage change in the price of cheese. (Layton, Robinson, Tucker, 2016, p. 110) so it is therefore possible that the price floor has reduced their total revenue.