How can a price ceiling make consumers better off? Under what circumstances might it make them worse off?
If the supply curve is totally inelastic a price ceiling will raise consumer surplus. If the demand curve is inelastic, price controls might result in a net loss of consumer surplus because consumers willing to pay a higher price are unable to purchase the price-controlled good or service. The loss of consumer surplus is higher than the transfer of producer surplus to consumers. If demand is elastic (and supply is relatively inelastic) consumers into the aggregate will enjoy raise in consumer surplus.