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
Short-term funds having a maturity of 15 days and over are categorized as term money. Banks access this term money route to bring greater stability in their short

What happens when a bank charges discount interest on a loan? While a bank charges discount interest on a loan the required interest payment is subtracted from the loan carries o

In modern strategic management accounting it is important to use appropriate performance measurements and control concepts, underpinned by theories and models applied in a variety

Limitation of profit maximisation -Quality of Benefits Probably the most vital technical limitation of profit maximisation as an operational objective, is that it ignores qua

How could we project exchange rates in order to be able to forecast exchange differences? If someone knew how to predict exchange rates, they would be a millionaire and would n

#What are the food and beverages industry financial ratios for 2011,2010,2009? 1. Liquidity(current/quick), Asset Management(Inventory Turnover, total assets turnover),Debt Menagem

Unlike the mortgage pass-through securities, the mortgage-backed bonds are debt obligations of the mortgage originator. Every issue of such bonds should be backed

Effective Duration and Convexity The modified duration is a measure of the sensitivity of a bond's price to interest rate changes; the assumption made here is that the expected

Concepts of Cost of Capital 1. Explicit Cost And Implicit Cost The explicit cost of any source of finance may be described as the discount rate that equates the current v

Clemson Software is considering a latest project whose data are given below.  The needed equipment has a 3-year tax life, after which it will be worthless,and it will be depreciate