If the Intended Aim of the Price Ceiling Set at $6

question 135

Multiple Choice

If the intended aim of the price ceiling set at $6, as shown in the graph, was a net increase in the well-being of consumers, what would positive analysis consider?

• A) Whether the surplus transferred from consumers to producers is greater than the consumer surplus lost.
• B) Whether the producer surplus lost to deadweight loss is greater than the producer surplus gained from a higher price.
• C) Whether the surplus transferred from producers to consumers is greater than the consumer surplus lost.
• D) Whether the producer surplus lost due to lower prices is greater than the producer surplus lost due to fewer transactions taking place.

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Definitions:

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