--%>

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 : Representatives of platyhelminth phylum

    Write down the best known representatives of the platyhelminth phylum?

  • Q : Expalin Building innovation culture

    Building the innovation culture: Innovation culture is one of the most important factors in an organization which talks about attitudes, technology, knowledge sharing and business activities. Innovation is simply belongs to change and it is also a pro

  • Q : Illustrations of secretory cells

    Illustrations of secretory cells: Exocrine and Endocrine pancreatic cells, parathyroid and thyroid endocrine cells, adenohypophysis, adrenal & pineal endocrine cells, the numerous kinds of gastric exocrine and endocrine cells, the mucous secretory

  • Q : Events mark beginning and end of third

    Which events mark the beginning and end of third interphase period? What take place in the cell during this period?

  • Q : Reproduction in roundworms Name the

    Name the kind of reproduction which takes place in roundworms? What usual feature do nematode sperm cells contain?

  • Q : Describe Participative Management

    Participative Management: It refers to as an open form of management where staffs are dynamically involved in organization’s decision making procedure. The idea is applied by the managers who realize the significance to human intellect and seek

  • Q : Define cell theory Cell theory : The

    Cell theory: The Cell theory is a theory which asserts that cell is the constituent unit of the living beings. Prior to the discovery of the cell, it was not accepted that the living beings were made up of building

  • Q : How pulmonary ventilation influence the

    How does pulmonary ventilation influence the carbon-dioxide concentration in the blood? What occurs to the carbon-dioxide concentration and to the blood pH whenever the respiratory frequency is either increased or decreased?

  • Q : CD4 lymphocytes-How does HIV replicate

    Describe briefly about CD4 lymphocytes? Write down the relationship between these cells and HIV? How does HIV replicate?

  • Q : Ploidy reduction-meiosis division

    Throughout which meiosis division does ploidy reduction take palce? Does ploidy reduction take place in mitosis?