--%>

Why does a price ceiling result in deadweight loss

Why does a price ceiling regularly result in a deadweight loss?

A price ceiling will tend to result into deadweight loss since at any price below the market equilibrium price, quantity supplied will be below the market equilibrium quantity supplied, resulting a loss of surplus to producers. Consumers will purchase less than the market equilibrium quantity, resulting a loss of surplus to consumers. Consumers will also purchase less than the quantity they demand at the price set through the ceiling. The surplus lost through consumers and producers is not captured by either group, and surplus not captured by market participants is deadweight loss.

 

   Related Questions in Biology

  • Q : Describe inherent cost structure of the

    Normal 0 false false

  • Q : Illustration of electrophilic

    Provide some illustration of electrophilic substitution reaction.

  • 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?

  • Q : Operation Management homework. This is

    This is operation management course. 1. Can you do these assignemnts thoroughly? 2. How much does it cost? 3. How long will it take to complete theses assginments>

  • Q : Describe the components of Urine

    Briefly describe the components of Urine? Also state the term renal failure?

  • Q : Function of immune system Specify the

    Specify the function of immune system?

  • Q : Deciduous broadleaf species With

    With respect to trees, arctic and alpine environments tend to be dominated by conifers and deciduous broadleaf species with diffuse-porous wood. Why might deciduous broadleaf species with ring-porous wood be less common in these environments?

  • Q : Cultural Diversity for Individuals -

    a) Live and work outside your home country. Be willing to take an overseas assignment whenever the opportunity arises. b) Travel outside your home country extensively. c) While away, adapt to the customs of the new country. Get to know the local residents, rather than spending you

  • Q : Heredity Biological Factor -

    This is the transmission of the qualities from ancestor to descendant through a mechanism lying primarily in the chromosomes of the germ cells. Heredity predisposes to certain physical, mental, and emotional states. It has been established through research on animals that physical and psychologic

  • Q : Chemical compounds in eggshell- white

    What are the predominating chemical compounds respectively in eggshell, white and yolk?