How has the price ceiling affected producer surplus

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Reference no: EM13239552

Assume the government sets a price ceiling below the Pe. Plot this price ceiling price on your diagram. What is the new market situation? How will it be decided who can buy the quantity supplied of gasoline?

1. How has the price ceiling affected consumer surplus? Why did it have this effect?

2. How has the price ceiling affected producer surplus? Why did it have this effect?

3. Has a deadweight loss been created? Why? Does the price ceiling cause economic inefficiency?

Reference no: EM13239552

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