Use the following to answer question :
-(Figure: Quantity Controls)Use Figure: Quantity Controls.If the government decides to restrict the quantity sold to 100,which statement is FALSE?
A) Total surplus will fall by areas C and E.
B) The market is not at the free-market equilibrium.
C) Consumer surplus is maximized.
D) Some mutually beneficial transactions have been eliminated.

Question

Use the following to answer question : 
-(Figure: Quantity Controls)Use Figure: Quantity Controls.If the government decides to restrict the quantity sold to 100,which statement is FALSE?
A) Total surplus will fall by areas C and E. 
B) The market is not at the free-market equilibrium. 
C) Consumer surplus is maximized. 
D) Some mutually beneficial transactions have been eliminated.

Quizplus · Accepted Answer

Consumer surplus is not maximized when the quantity is restricted to 100, as the market is not at equilibrium and some beneficial transactions are eliminated.

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