Define supply curve for a good is totally inelastic, Financial Management

Assignment Help:

Suppose the supply curve for a good is totally inelastic.  If the government imposed a price ceiling below the market-clearing level, would a deadweight loss result?  Explain.

While the supply curve is totally inelastic, the imposition of an effective price ceiling transfers all loss in manufacturer surplus to consumers.  Consumer surplus rises by the variation among the market-clearing price and the price ceiling times the market-clearing quantity.  Consumers capture all reduces in total revenue.  Hence, no deadweight loss occurs.


Related Discussions:- Define supply curve for a good is totally inelastic

Methods of easing cash shortages, Q. Methods of easing cash shortages? ...

Q. Methods of easing cash shortages? There are several techniques which can potentially offset the effects of cash shortages. In the long-term nevertheless the adequacy of cash

Characteristics of a stock exchange, Characteristics of a Stock Exchange ...

Characteristics of a Stock Exchange The requirements for a stock exchange to act as a platform for buying and selling securities is dependant upon the trading prerequisites. Som

Show the objectives of inventory management, Q. Show the Objectives of Inve...

Q. Show the Objectives of Inventory Management? Objectives of Inventory Management- The objectives of Inventory Management are: To maintain a adequate large size of inventor

Types of working capital, TYPES OF WORKING CAPITAL Working capital can ...

TYPES OF WORKING CAPITAL Working capital can be split up into two categories on the basis of time. They are Permanent Working Capital and Temporary or Variable Working capital

Valuing a putable bond using binomial model, In a putable bond, the b...

In a putable bond, the bondholder has the right to force the issuer to pay off the bond prior to the maturity date. Let us consider the previous example with the

Hedge fund, Definition of 'Hedge Fund': An aggressively managed portfo...

Definition of 'Hedge Fund': An aggressively managed portfolio of investments that uses advanced investment strategies define as leveraged, short, long and derivative positions

General functions of financial management, GENERAL FUNCTIONS Several f...

GENERAL FUNCTIONS Several functions of financial management currently range from planning of funds to distribution of earnings and also are extend beyond.  Some of the well-kn

Bond derivatives-callable bonds , Callable bonds give the right...

Callable bonds give the right to the issuer to redeem the bond prior to its maturity date, at a specified call price. These bonds are beneficial to the

Financial analysis task force, Task I am sure you are aware that the c...

Task I am sure you are aware that the corporate annual meeting is coming up soon. As part of the Treasurer's presentation, I have been asked to propose a Special Capital Requi

What are the benefits of the jit inventory control system, What are the ben...

What are the benefits of the JIT inventory control system? The just-in-time (JIT) inventory control system lesser inventory carrying costs and tends to increase quality.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd