Homework Answers
Answer :- Option 'c' is the correct Answer
When price ceiling were not placed
- Consumer Surplus = A+B
- Producer Surplus = C+D+E+F
When price ceiling of $8 were placed, then
- Consumer Surplus = A +C
- Producer Surplus = E
This is because of that, after placing price ceiling of $8, B+D+F is the area which is equal to deadweight loss area occur, and a second reason which causes a change is that the some part of producer surplus (C) is transferred to consumer surplus.
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050105 Consider the market shown below: If a price ceiling of $8 per unit were placed...
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Refer to the table above. If the market is originally in
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