With Reference to the Graph Above, If the Intended Aim

question 129

Multiple Choice

With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers, then positive analysis would consider:

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

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