--%>
Assignment Help - homework help

Why does a price ceiling result in deadweight loss

Why does a price ceiling regularly result in a deadweight loss?

A price ceiling will tend to result into deadweight loss since at any price below the market equilibrium price, quantity supplied will be below the market equilibrium quantity supplied, resulting a loss of surplus to producers. Consumers will purchase less than the market equilibrium quantity, resulting a loss of surplus to consumers. Consumers will also purchase less than the quantity they demand at the price set through the ceiling. The surplus lost through consumers and producers is not captured by either group, and surplus not captured by market participants is deadweight loss.

 

   Related Questions in Biology

  • Q : Some cases is mitosis a synonym of

    Why in some cases is mitosis a synonym of reproduction?

    		•
  • Q : Mitosis occurs with low frequency in

    Mitosis occurs with low frequency in tissues of the slow renovation, such as the bones in adults and the connective tissues. Illustrate.

    		•
  • Q : Describe Corporate Culture Corporate

    Corporate Culture: Some troubles of organizations have to do with the organizational culture: the manner in which the organization, comprising its stakeholders, use to perform and think. This organizational mental make-up is more than strategy or stru

    		•
  • Q : Define Direct Sales Direct Sales : It

    Direct Sales: It is the sale of a consumer service or product, person-to-person, outside of a fixed retail location. These services and products are marketed to customers through independent salespeople. Depending upon the company, the salespeople may

    		•
  • Q : Name the hormones secreted by thyroid

    Name the hormones secreted by the thyroid gland? Also describe their functions?

    		•
  • Q : Main cells of connective tissue proper

    Write about the main cells of connective tissue proper? Specify the name given to intercellular material which surrounds these cells?

    		•
  • Q : Features or Nature of Planning Features

    Features or Nature of Planning 1 Planning is goal oriented: organization are set up with a general purpose in view. Specific

    		•
  • Q : Divison of cerebrum List out the steps

    List out the steps in which cerebrum anatomically divided?

    		•
  • Q : Key Concept of Different Views of

    The concepts for developing these different views of organizational learning come primarily from three sources: 1) The articles the authors see an organization as a culture and the juxtaposition of order and disorder often stimulates learning. 2) The social construction of knowled

    		•
  • Q : What is opsonin What is opsonin?

    What is opsonin?

    		•