The number of "Gore in 2004" buttons demanded on a certain university campus is given by D(p) = 100 - p, where p is the price of buttons measured in pennies. The supply function is S(p) = p. The current administration manages to enforce a price ceiling of 40A2 per button. The effect on net consumer's surplus is
A) an increase of $5.50.
B) an increase of $3.50.
C) no change.
D) a decrease of $3.50.
E) a decrease of $5.50.

Question

Quizplus · Accepted Answer

The price ceiling of 40 pennies results in a higher consumer surplus compared to the equilibrium price of 50 pennies, leading to an increase of $3.50 in net consumer surplus.

The Number of "Gore in 2004" Buttons Demanded on a Certain