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What happens when you Impose a price ceiling below the equilibrium price will lead to higher consumer surplus and an increase in social welfare?
Wiki User
∙ 13y ago
If you impose this low price ceiling, manufacturers will make less and be forced to lay off workers causing higher unemployment. Therefore, social welfare would decreaase, not increase.
Wiki User
∙ 13y ago
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What happens to equilibrium price and quantity when there is an increase in the consumers income?
When one part of the equation is increased (consumer income) than the equation no longer had equequilibrium.
What happens if demand and supply increase?
the price and value of the item will decrease.
What happens to the market when a price ceiling is imposed?
If the price ceiling is above equilibrium: no effect. If the price ceiling is below equilibrium: price lowers to the ceiling level and supply falls. There is too much demand for the current level of supply. A black market forms to capture unmet demand at high prices.
If a binding price ceiling is imposed in a market?
nothing happens to the market since it will naturally move towards the equilibrium
What happens to the equilibrium price and equilibrium quantity in a market if the demand curve shifts to the right?
If the demand shift to the right, the equilibrium price and quantity will shift from the initial equilibrium price and quantity to the next, i mean the equilibrium price and quantity will increase as compare to the first.
What happens to equilibrium price and quantity when there is an increase in the consumers income?
When one part of the equation is increased (consumer income) than the equation no longer had equequilibrium.
What happens if demand and supply increase?
the price and value of the item will decrease.
What happens to equilibrium price of a commodity if there is decrease in its demand and increase in its supply?
Equilibrium price increases
What happens to the market when a price ceiling is imposed?
If the price ceiling is above equilibrium: no effect. If the price ceiling is below equilibrium: price lowers to the ceiling level and supply falls. There is too much demand for the current level of supply. A black market forms to capture unmet demand at high prices.
If a binding price ceiling is imposed in a market?
nothing happens to the market since it will naturally move towards the equilibrium
What happens to the equilibrium price and equilibrium quantity in a market if the demand curve shifts to the right?
If the demand shift to the right, the equilibrium price and quantity will shift from the initial equilibrium price and quantity to the next, i mean the equilibrium price and quantity will increase as compare to the first.
What happens to the equilibrium concentration of reactants when the volume of the reaction system is decreased and why?
decrease in reactants and increase in products
When the price of a capital good increase what happens to the prices of related consumer goods and services?
Prices increase due to the increase in production cost.
When the price of a capital good increase what happens to the prices of related consumer goods and services Why?
Prices increase due to the increase in production costs.
What happens to consumer surplus if the price is above equilibrium?
When the price is above equilibrium, there is a surplus because supply is greater than demand. The price of the good will naturally decrease back to its equilibrium price where demand and suppy interesect, thus eliminating the surplus.
What happens to a market in equilibrium when there is an increase in supply?
Quantity supplied will exceed quantity demanded, so the price will drop.
If demand decreases and supply is constant what happens to the equilibrium price?
If demand decreases and supply is constant, the price will increase.
