If the government imposes a price ceiling that is lower than the market clearing price, then

A) consumer surplus will increase while producer surplus will decrease.
B) consumer surplus will decrease while producer surplus will increase.
C) both consumer surplus and producer surplus will decrease.
D) both consumer surplus and producer surplus will increase.


Answer: C

Economics

You might also like to view...

If the market in the figure above is a profit-maximizing single-price monopoly, the deadweight loss is the area ________

A) ABH B) BFGH C) ACG D) BCD E) ACE

Economics

What are the components of fiscal policy? Explain how fiscal policy affects aggregate demand

What will be an ideal response?

Economics

Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

a. Michelle can attend the concert only if she takes her sister with her. b. Michael is hungry and homeless. c. Andrea must repair the tire on her bike before she can ride it to class. d. Dani must decide between going to Florida or Brazil for spring break.

Economics

Name two macroeconomic variables that decline when an economy goes into recession, and name one macroeconomic variable that rises

Economics