Assume the supply curve for a good is completely inelastic. If the government imposed a price ceiling below the market-clearing level, would deadweight loss result? Describe.
While the supply curve is completely inelastic, the imposition of an effective price ceiling transfers all loss in producer surplus to consumers. Consumer surplus increases by the difference between the market-clearing price and the price ceiling times the market-clearing quantity. Consumers capture all reduction in total revenue. Thus, no deadweight loss occurs.