(Figure: The Market for Science Fiction Books) Consider the figure The Market for Science Fiction Books. Suppose the market for science fiction books is initially equilibrium but that the government then sets a price ceiling for books in this market at $18. Do consumers gain or lose from this price control, and by how much? Do producers gain or lose from this price control, and by how much? How is total surplus affected? Price per book $40 29.33 24 18 32 48 66 Supply Demand Quantity (per week)

(Figure: The Market for Science Fiction Books) Consider the figure The Market for Science Fiction Books. Suppose the market for science fiction books is initially equilibrium but that the government then sets a price ceiling for books in this market at $18. Do consumers gain or lose from this price control, and by how much? Do producers gain or lose from this price control, and by how much? How is total surplus affected? Price per book $40 29.33 24 18 32 48 66 Supply Demand Quantity (per week)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

(Figure: The Market for Science Fiction Books) Consider the figure The Market for Science Fiction Books.
Suppose the market for science fiction books is initially equilibrium but that the government then sets a price
ceiling for books in this market at $18. Do consumers gain or lose from this price control, and by how much?
Do producers gain or lose from this price control, and by how much? How is total surplus affected?
Price per
book
$40
29.33
24
18
32 48 66
Supply
Demand
Quantity (per week)
A/

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Step 1: Define Price ceiling.

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Step 2: Calculate consumer surplus.

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Step 3: Calculate producer surplus.

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Step 4: Calculate total surplus.

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