--%>

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 : What is Lean Organization Lean

    Lean Organization: In order to ensure that improvement effort remains focused, the procurement process was scoped. The case is of an organization which has huge inventories piled up in the business processes and is trying to find a me

  • Q : Reproductive novelties of beings of the

    As compared to amphibians name the two reproductive novelties of beings of the class Reptilia for the survival in dry atmospheres?

  • Q : Is there larval stage in the echinoderms

    Is there larval stage in the echinoderms?

  • Q : Route of ingested food Specify the

    Specify the route of ingested food from swallowing until it reaches the duodenum?

  • Q : Phylum of animal kingdom-exoskeleton

    Which other phylum of animal kingdom present species with exoskeleton?

  • Q : Why safety may not necessarily improve.

    Suppose that the government of the state of New Jersey has find out that a large number of injuries & deaths have taken place as a result of accidents involving the installation & repairs of electrical equipment at private residences. In reaction to th

  • Q : Condition in which DNA is made up based

    Is there any condition in which DNA is made up based on a RNA template? Name the enzyme comprised of?

  • Q : Difference between plasma membrane and

    Difference between plasma membrane and cell wall: Plasma membrane and cell wall is not similar thing. Plasma membrane, also termed as cell membrane, is the outer membrane general to all living cells and it is made

  • Q : Requirement for accuracy-Market

    Requirement for accuracy: The accuracy condition of the system decides the need level of detail, quality and feature of the input data, and superiority of the system logic. The system should be so designed that it provides accuracy that is equivalent

  • Q : Two groups which can

    Write down the two groups which can nitrogen-containing bases which form DNA and RNA be categorized? What is the criterion employed in that categorization?