--%>

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 : Schistosomes discriminate sex separation

    How do schistosomes discriminate regarding sex separation?

  • Q : Environment drier-stomata Do plants

    Do plants placed under an environment drier than habitat where they are employed to living have a raise or a lessening in the time throughout which their stomata remain open?

  • Q : What is Foreign Investment Foreign

    Foreign Investment: The flows of capital from one nation to the other in exchange for important ownership stakes in domestic corporations or other domestic assets. Usually, foreign investment symbolizes that foreigners take a somewhat lively role in m

  • Q : Net energetic gain of process How many

    How many number of ATP molecules are made subsequent to the aerobic respiration and also write down the net energetic gain of the process.

  • Q : Infructescences-pseudofruits and

    Describe the term infructescences, pseudofruits and parthenocarpic fruits?

  • Q : Explanation of bio ethics Give a brief

    Give a brief explanation of bio ethics?

  • Q : What is Corporate Vision Corporate

    Corporate Vision: It is an aspirational description of what an organization would like to attain or accomplish in the mid-term or long-term future. This is intended to serves as a obvious guide for selecting present and future courses of action.

  • Q : Define the term Train-the-Trainer

    Train-the-Trainer: The field of corporate training centers on the idea of lifelong learning, that purports that all staff can continually enhance on their skills through workplace training programs. Likewise, train-the-trainer programs seek to assist

  • Q : Chromatin made up of which substance

    Chromatin made up of which substance?

  • Q : Photosynthesis rate according to the

    Photosynthesis rate differs according to the photic energy intensity. Does similar take place in aerobic respiration? What occurs to the glucose balance as an outcome of such variations?