Problem
A. Using letters, identify the area of consumer surplus before the price ceiling.
B. Using letters, identify the aera of producer surplus before the price ceiling.
C. Suppose the government imposes a price ceiling at "P_Ceiling". What is the quantity demanded by consumers with the price ceiling?
D. Suppose the government imposes a price ceiling at "P_Ceilnig". What is the quantity supplied by producers with the price ceiling?
E. How would you characterize the difference between the quantity demanded and quantity supplied at the price ceiling?
F. Using letters, identify the area that would represent consumer surplus after the price ceiling. Are consumers better off or worse off because of this intervention?
G. Using letters, identify the area that would represent producer surplus after the price ceiling. Are producers better off or worse off because of this intervention?
H. Using letters, identify the areas that would represent the dead weight loss from the price ceiling. What is creating the dead weight loss or market failure in this example?