EBK MACROECONOMICS
EBK MACROECONOMICS
5th Edition
ISBN: 8220106773925
Author: KRUGMAN
Publisher: MAC HIGHER
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Chapter 4, Problem 10P
To determine

Concept Introduction:

Price Control: They are some types of restrictions on the range of price in the market which are generally imposed by the government to protect the interest of consumers and producers.

Price Ceiling: When the government limits the maximum price, which can be charged by sellers from consumers then it is referred as a price ceiling. It may be binding or non-binding. When the maximum price is below market equilibrium price then it is binding. If the maximum price is above the market equilibrium price, then it is not binding.

Consumer Surplus: It is the difference between the amount that a consumer wants to pay and the real amount which he pays for goods and services.

Producer Surplus: It is the difference between the amount which a producer wants to receive and the real amount which he receives for goods and services.

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