Which of the following is NOT one of the consequences of a binding Price Ceiling?Select one:a.an illegal black marketb.a shortagec.a surplusd.a decrease in the price of the good below its equilibrium price Price (P)S$4.00$2.50$0.50200Quantity (Q)The market shown in the figure above is in equilibrium at the socially optimal quantity of 200 units. The Demand curve captures all socialbenefits to consumers, and the Supply curve captures all social costs to producers. In this case, Consumer Surplus will be:Select one:a. $100b. $300c. $200d. $150

Equilibrium is achieved at the output level where Qs equals Qd.

Answered: Which of the following is NOT one of…

Which of the following is NOT one of the consequences of a binding Price Ceiling? Select one: a. an illegal black market b. a shortage c. a surplus d. a decrease in the price

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

Which of the following is NOT one of the consequences of a binding Price Ceiling?

Select one:

an illegal black market

a shortage

a surplus

a decrease in the price of the good below its equilibrium price

Price (P)
S
$4.00
$2.50
$0.50
200
Quantity (Q)
The market shown in the figure above is in equilibrium at the socially optimal quantity of 200 units. The Demand curve captures all social
benefits to consumers, and the Supply curve captures all social costs to producers. In this case, Consumer Surplus will be:
Select one:
a. $100
b. $300
c. $200
d. $150

Video Definition Video Definition Government regulation setting a maximum price a business may charge for a given good or service. A price ceiling itself does not cause demand or supply to change. It is simply a mechanism used to set a price that can be legally charged in the market. Price ceilings are often implemented during times of crisis to avoid price gouging.

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