A Price Ceiling Below the Equilibrium Price Is Likely to Result

question 142

Multiple Choice

A price ceiling below the equilibrium price is likely to result in a persistent _____,a transfer of surplus from _____,and _____ deadweight loss.

• A)surplus;producers to some consumers;some
• B)shortage;producers to some consumers;some
• C)shortage;some consumers to producers;no
• D)surplus;some consumers to producers;some

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Definitions:

Marginal Benefit

The extra pleasure or benefit gained from the consumption of one more unit of a good or service.

Optimal Quantity

The quantity of a good or service that maximizes a firm's profits or an individual's utility, based on cost and benefit analysis.

Marginal Curve

A graphical representation of the marginal cost, marginal revenue, or marginal benefit of producing additional units of a good or service.

Marginal Cost

The extra expenditure involved in creating one additional unit of a product or service.