Price floors and price ceilings
A) always reduce total surplus.
B) reduce consumer surplus and increase producer surplus.
C) reduce producer surplus and increase consumer surplus.
D) Not enough information to determine.
D
You might also like to view...
Suppose that the demand curve D m for medical services can be characterized by the equation M = 2000 - P, where M is the amount of medical services received per year and P is the price. Suppose further that P 0 is constant at 800.
(a) Find the equilibrium quantity of services at P 0 . (b) Find the equilibrium quantity of services when there is only a co-payment of 20% required such that the price is 0.2P 0 . (c) How much additional expenditures induced by insurance are created?
Compared to a perfectly competitive industry, a monopoly produces a smaller output and charges a higher price.
Answer the following statement true (T) or false (F)
What is one of the traditional political uses of tariffs?
a. protection of borders b. protection of vested economic interests c. protection of military secrets d. protection of exchange rates
The argument that consumers will not be willing to pay any more for two items sold as one than they would for the two items sold separately is used to justify the legality of which of the following?
a. resale price maintenance b. tying c. predatory pricing d. free-riding