Consider a market with a price ceiling.If the price ceiling is raised which of the following would happen?
A)The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would decrease
B)The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would increase
C)The consumer surplus,the producer surplus and the dead weight loss would all decrease
D)The consumer surplus,the producer surplus and the dead weight loss would all increase
E)The consumer surplus would decrease,the producer surplus would increase and the dead weight loss would decrease

Question

Quizplus · Accepted Answer

Raising a price ceiling allows prices to rise, reducing consumer surplus but increasing producer surplus and decreasing deadweight loss as the market moves closer to equilibrium.

Consider a Market with a Price Ceiling