mpetitive and initially in equilibrium at a price of p₂ and a quantity of Q₂. w suppose the government applies a price ceiling of p₁. Compared with the market-clearing equilib sumer surplus would A. increase by areas B and F. B. increase by area B. C. increase by area C. D. increase by area C and decrease by area E. E. decrease by area E.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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please help me answer all 3 multiple choice questions
Consider the market for electricity illustrated in the figure to the right. Suppose the market is perfectly
competitive and initially in equilibrium at a price of p₂ and a quantity of Q₂.
Now suppose the government applies a price ceiling of p₁. Compared with the market-clearing equilibrium,
consumer surplus would
OA increase by areas B and F.
OB. increase by area B.
OC. increase by area C.
OD. increase by area C and decrease by area E.
O E. decrease by area E.
In turn, producer surplus would
OA. decrease by area C.
OB. decrease by areas C and F.
OC. decrease by areas B and E.
OD. decrease by areas B, E, and G.
OE. increase by area B.
Consequently, with the price ceiling, deadweight loss would equal
O A. areas B, C, E, and F.
OB. area F.
OC. areas E and F.
OD. no areas.
OE. area E.
Price of electricity
P3
P₂
P₁
A
B
C
D
E
F
G
Q₁
Q3
. Q₂
Quantity of electricity
S
D
Transcribed Image Text:Consider the market for electricity illustrated in the figure to the right. Suppose the market is perfectly competitive and initially in equilibrium at a price of p₂ and a quantity of Q₂. Now suppose the government applies a price ceiling of p₁. Compared with the market-clearing equilibrium, consumer surplus would OA increase by areas B and F. OB. increase by area B. OC. increase by area C. OD. increase by area C and decrease by area E. O E. decrease by area E. In turn, producer surplus would OA. decrease by area C. OB. decrease by areas C and F. OC. decrease by areas B and E. OD. decrease by areas B, E, and G. OE. increase by area B. Consequently, with the price ceiling, deadweight loss would equal O A. areas B, C, E, and F. OB. area F. OC. areas E and F. OD. no areas. OE. area E. Price of electricity P3 P₂ P₁ A B C D E F G Q₁ Q3 . Q₂ Quantity of electricity S D
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