If the government implements a binding price ceiling on insulin,this will have all of the following effects on the market for insulin except
A)a decrease in economic surplus.
B)a decrease in producer surplus.
C)an increase in deadweight loss.
D)a more efficient equilibrium.

Question

Quizplus · Accepted Answer

Implementing a binding price ceiling on insulin will create a shortage of insulin because the quantity demanded will exceed the quantity supplied at the new lower price. This will lead to an inefficient allocation of resources and deadweight loss. Therefore, there will not be a more efficient equilibrium. However, the decrease in economic surplus and producer surplus will occur due to this.

If the Government Implements a Binding Price Ceiling on Insulin,this