Define supply curve for a good is totally inelastic, Financial Management

Assignment Help:

Suppose the supply curve for a good is totally inelastic.  If the government imposed a price ceiling below the market-clearing level, would a deadweight loss result?  Explain.

While the supply curve is totally inelastic, the imposition of an effective price ceiling transfers all loss in manufacturer surplus to consumers.  Consumer surplus rises by the variation among the market-clearing price and the price ceiling times the market-clearing quantity.  Consumers capture all reduces in total revenue.  Hence, no deadweight loss occurs.


Related Discussions:- Define supply curve for a good is totally inelastic

Determine the steps for managing the funds, Determine the steps for managin...

Determine the steps for managing the funds For managing the funds first thing you would need is information. Externalinformation has to be collected from environment and accoun

APPLICABILITY OF OPERATING CYCLE, #questioDiscuss the applicability of an o...

#questioDiscuss the applicability of an operating cycle in the vegetable growing business n..

What is the role of a broker in security transactions, What is the role of ...

What is the role of a broker in security transactions? How are brokers compensated? Brokers manage orders to sell or buy securities. Brokers are agents who deal on behalf of an

Types of us treasury securities, Under treasuries, there exist ...

Under treasuries, there exist different types of securities like treasury bills, treasury notes, treasury bonds, inflation protection securities

Inventory is sometimes thought of as a necessary evil, Inventory is sometim...

Inventory is sometimes thought of as a necessary evil.  Explain. Inventory ties up funds and these funds aren't earning an unambiguous return.  Some inventory is habitually nec

Compare and contrast j''s current style of management, When J was promoted ...

When J was promoted to be the new Sales and Marketing Manager for Company L, after working there in different capacities over the last ten years, it was a popular choice between he

Examine about environmental analysis, Examine about Environmental (external...

Examine about Environmental (external) analysis "A study that considers potential environmental effects during planning phase before an investment is made or an operation start

Problems in computations of cost of retaining earning, Q. Problems in compu...

Q. Problems in computations of cost of retaining earning? Problems in computations of cost of retaining earning: it is sometimes argued that retained earning do not involve any

Multicollinearity, Multicollinearity As the degree of correlation betwe...

Multicollinearity As the degree of correlation between the independent variables increases, the regression coefficients become less reliable. That is, although the independent

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd