Multiple Choice
With reference to the graph above,if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers,then positive analysis would consider:
A) whether the surplus transferred from consumers to producers is larger than the consumer surplus lost to deadweight loss.
B) whether the producer surplus lost to deadweight loss is larger than the producer surplus gained from a higher price.
C) whether the surplus transferred from producers to consumers is larger than the consumer surplus lost to deadweight loss.
D) whether the producer surplus lost due to lower prices is larger than the producer surplus lost due to fewer transactions taking place.
Correct Answer:
Verified
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