Supply: p= q Demand: p= 200-q 25.The government enacts a price ceiling of $120. What is...

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Economics

Supply: p= q Demand: p= 200-q
25.The government enacts a price ceiling of $120. What is thenew Consumer Surplus?
A)$10,000 (B)$1,000 (C)$2,225 (D)None of the above
26.Assume now that the government enacts a price ceiling of $20.What is the new consumer Surplus? Â Â
A)$3,200 (B)$3,400 (C)$312.50 (D)$6,400
27.When the price ceiling is $20, consumer surplus declines,compared to the marketequilibrium. Why?
(A)The lower prices do not overcome reduced quantity (B)Thelower quantity does compensate for higher prices (C)Both A andB
(D)The lower prices create a marginal elasticity of demand
28.What is the Deadweight Loss from a price ceiling of $20?
(A)$3,200 (B)$3,400 (C)$10,800 (D)$6,400
29.What is the Producer Surplus under a price ceiling of$20?
(A)$400 (B)$200 (C)$100 (D)$166.67
30.Which of the following policies is an example of a priceceiling?
(A)Rent controls (B)Minimum wages (C)Taxes (D)Subsidies

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Q25From the above graph of demand and supply the equilibrium priceis obtained to be P 100 A price ceiling of 120 is thereforenot binding and hence the consumer surplus would be the same See Answer

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