If the intended aim of the price ceiling set at $6, as shown in the graph, was a net increase in the well-being of consumers, then normative analysis would conclude that the policy was:
A) effective because the surplus gained by consumers through lower prices is less than the surplus they lost due to fewer transactions taking place.
B) ineffective because the surplus gained by consumers through lower prices is less than the surplus they lost due to fewer transactions taking place.
C) effective because the surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
D) There is no "right" conclusion to be reached (in a normative sense) because different people will have different opinions concerning what constitutes a better outcome.
Correct Answer:
Verified
