Define price ceiling make consumers better off, Financial Management

How can a price ceiling make consumers better off?  Under what conditions might it make them worse off?

If the supply curve is completely inelastic a price ceiling will raise consumer surplus.  If the demand curve is inelastic, price controls might result in a net loss of consumer surplus as consumers willing to pay a higher price are not able to purchase the price-controlled good or service.  The loss of consumer surplus is greater as compared to the transfer of manufacturer surplus to consumers. If demand is elastic (and supply is relatively inelastic) consumers in the aggregate will enjoy a raise in consumer surplus.

Posted Date: 5/8/2013 2:29:52 AM | Location : United States







Related Discussions:- Define price ceiling make consumers better off, Assignment Help, Ask Question on Define price ceiling make consumers better off, Get Answer, Expert's Help, Define price ceiling make consumers better off Discussions

Write discussion on Define price ceiling make consumers better off
Your posts are moderated
Related Questions
Wing Yin Tsui, CEO of Lian Huang & Wong Bin Dean Hwang Manufacturing Limited is considering a four year project. The project requires an initial investment of $10,000,000 to buy ne

limitations of using a periodic inventory system

Tactics can be used by company to protect itself. Before the bid Types of Shareholder Having the right shareholders on board who can be

1. identify an analytic theme or goal for a fictitious business or something that you are working on (e.g. Maximize revenue in a car dealership) 2. Build an Enterprise Bus Matri

Placement on career path: The next step of the career planning process is to place an individual on a chosen career path. A career path is the logical possible sequence of pos

Illustrate the structure of financial markets? Structure of financial markets: Financial markets can be categorized onto the basis of several parameters as follows: the n

Operating segments An operating segment is a component of an organisation It engages in business activities from that it can earn revenues and incur expenses(this also c

SEC is the Regulatory body for investor protection in the United States which is created through the Securities Exchange Act of 1934.

Q. Accounting Principles Board ? Accounting Principles Board (APB) -senior technical committee of AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA) that issued pronoun

Q. Calculation of Cost of Capital? Calculation of Cost of Capital: - Calculation of cost of capital includes: (A) Calculation of cost of specific sources of finance (B) C