Refer to the figure below. Suppose a consumer protection group convinces the government to impose price controls in this market. If the government requires cheese to be sold for less than the equilibrium price, then, relative to before the price controls, total consumer surplus in the market:
A)would increase because consumers would be able to purchase the same quantity of cheese at a lower price.
B)would increase because consumers would be able to purchase more cheese at a lower price.
C)could either increase or decrease.
D)would decrease because of the reduction in equilibrium price.

Question

Refer to the figure below. Suppose a consumer protection group convinces the government to impose price controls in this market. If the government requires cheese to be sold for less than the equilibrium price, then, relative to before the price controls, total consumer surplus in the market: 
A)would increase because consumers would be able to purchase the same quantity of cheese at a lower price. 
B)would increase because consumers would be able to purchase more cheese at a lower price. 
C)could either increase or decrease. 
D)would decrease because of the reduction in equilibrium price.

Quizplus · Accepted Answer

The Answer of Refer to the figure below. Suppose a consumer protection group convinces the government to impose price controls in this market. If the government requires cheese to be sold for less than the equilibrium price, then, relative to before the price controls, total consumer surplus in the market: 
A)would increase because consumers would be able to purchase the same quantity of cheese at a lower price. 
B)would increase because consumers would be able to purchase more cheese at a lower price. 
C)could either increase or decrease. 
D)would decrease because of the reduction in equilibrium price.

Refer to the Figure Below