Suppose that the equilibrium price in the market for widgets

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Suppose that the equilibrium price in the market for widgets is $5. If a law reduced the maximum legal price for widgets to $4:

a. any possible increase in consumer surplus would be larger than the loss of producer surplus.

b. any possible increase in consumer surplus would be smaller than the loss of producer surplus.

c. the resulting increase in producer surplus would be larger than any possible loss of consumer surplus.

d. the resulting increase in producer surplus would be smaller than any possible loss of consumer surplus.

Reference no: EM13853859

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