--%>

Effect of below the market-clearing level price ceiling

Assume the supply curve for a good is completely inelastic. If the government imposed a price ceiling below the market-clearing level, would deadweight loss result? Describe.
While the supply curve is completely inelastic, the imposition of an effective price ceiling transfers all loss in producer surplus to consumers. Consumer surplus increases by the difference between the market-clearing price and the price ceiling times the market-clearing quantity. Consumers capture all reduction in total revenue. Thus, no deadweight loss occurs.

   Related Questions in Biology

  • Q : Main gas exchange organs of plants

    Write down the main gas exchange organs of plants? How is the procedure accomplished?

  • Q : Some Examples of Diversity -

    There are numerous examples demonstrating the financial benefits that can accrue to companies that embrace diversity. Here are a few: I. Xerox plants using diverse work teams are now 30 per cent more productive than conventional plants. II. Procter & gamble achieves 30-40 per

  • Q : Describe the term EEG scan Briefly

    Briefly describe the term EEG scan? And as well describe the wave patterns appear in an EEG scan?

  • Q : Management science approach Management

    Management science approach Management science approach also known as mathematical or quantitative measurement of the approach, visualizes managemen

  • Q : Define Living Modified Organism Give a

    Give a brief explanation of (LMO) Living Modified Organism.

  • Q : What is glycemic index Glycemic index :

    Glycemic index: The glycemic index or GI is a ranking of foods on a scale from 0 to 100 according to the level to which they raise blood sugar levels subsequent to eating. The Glucose is given a relative number of 100 to give a baseline to which all o

  • Q : Significance of water-nitrogen and

    Write down the respective significance of water, nitrogen and carbon for living beings?

  • Q : What is Employee Relations Employee

    Employee Relations: Communications among employees and management regarding workplace decisions, conflicts, grievances, trouble resolutions, unions, and issues of combined bargaining. The maintenance of employee or

  • Q : Food transport through plant How are

    How are water, mineral salts and food transported throughout plant?

  • Q : Oxy-haemoglobin and haemoglobin How

    How oxy-haemoglobin and haemoglobin are different from each other? Where we can find the higher concentration of oxy-haemoglobin, within the peripheral tissues or within lungs?