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13 May 2018
For this question assume that the market was originally in equilibrium. Further assume that the government enacts an effective price ceiling. Given this information, answer the following questions.
1) In order for the price ceiling to be effective, would it have to be placed above or below the equilibrium price?
2) Would an effective price ceiling produce a surplus or shortage in the market?
3) As compared to a competitive market (equilibrium price), what affect would an effective price ceiling have on consumer surplus, producer surplus, and economic surplus?
For this question assume that the market was originally in equilibrium. Further assume that the government enacts an effective price ceiling. Given this information, answer the following questions.
1) In order for the price ceiling to be effective, would it have to be placed above or below the equilibrium price?
2) Would an effective price ceiling produce a surplus or shortage in the market?
3) As compared to a competitive market (equilibrium price), what affect would an effective price ceiling have on consumer surplus, producer surplus, and economic surplus?
Nelly StrackeLv2
14 May 2018
