Suppose That the Equilibrium Price in the Market for Widgets

question 69

Multiple Choice

Suppose that the equilibrium price in the market for widgets is $8.If a law reduced the maximum legal price for widgets to $7,what would be the result

• A)Any possible increase in consumer surplus would be larger than the loss of producer surplus.
• B)Any possible increase in consumer surplus would be smaller than the loss of producer surplus.
• C)The resulting increase in producer surplus would be larger than any possible loss of consumer surplus.
• D)The resulting increase in producer surplus would be smaller than any possible loss of consumer surplus.

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Definitions:

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