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
Question : (a) The role of the Public Expenditure Management System (PEMS) is to allocate and use resources responsively, efficiently and effectively'. Briefly explain the abo

define ratio analysis. explain the advantages of ratio analysis

a. The primary financial objective of a company is the maximization of the wealth of shareholders ...per corporate finance theory.    Though, this objective is usually replaced by

What is nondiversifiable risk? How is it measured? But for the returns of one-half the assets in a portfolio are flawlessly negatively correlated with the other half-which is e

Regulation of Mergers and acquisitions Mergers and acquisitions are regulated by: Competition commission If office of fair trading thinks that merg

How does the market determine the fair value of a bond? The fair value of a bond is a present value of the bond's coupon interest payments plus the present value of the face va

Suggestion Regarding Credit Limit Should It Be Approved Or Not What Should Be The Ammount Of Credit Limit That Electronics Give To Booth Plastics

Q. What is Deposit Method? Deposit Method - Related to sales of real estate, under this method seller doesn't recognize any profits, doesn't record a note RECEIVABLE and contin

Entity A is significantly smaller than B in terms of revenue and would not impact LOP's revenue to the same extent. However A earns a noticeably better gross profit margin at 26% a

Is the net income of a year the money the company made that particular year or is it a number whose significance is quite doubtful? The net income of a year is not money that a