Price floor creates surplus maximized by high price and elastic demand

Steps:

• Equilibrium at $10 sells 10,000 tickets, matching fixed capacity, so supply is fixed at 10,000.
• Minimum price acts as price floor above equilibrium, keeping quantity supplied at 10,000 but reducing quantity demanded.
• Surplus (unsold tickets) = 10,000 - quantity demanded at minimum price.
• Larger surplus occurs with greater price increase and elastic demand, as elastic demand causes bigger percentage drop in quantity for a given price rise (elasticity >1 in absolute value).

Why B is correct:

• $12 floor (20% price rise) with elastic demand causes >20% drop in quantity demanded per elasticity definition, minimizing quantity demanded and maximizing surplus.

Why the others are wrong:

• A: $11 floor (10% rise) with inelastic demand causes <10% drop in quantity, small surplus.
• C: $11 floor with elastic demand causes >10% drop, larger surplus than A but smaller than B's higher price.
• D: $12 floor with inelastic demand causes <20% drop in quantity, smaller surplus than B's elastic case.

Final answer: B