shift in consumer and producer surplus
Not what you're looking for?
1) The government will tax a good for various reasons, resulting in a fall in equilibrium quality while the prices rise. Could someone explain how price controls and taxes have influenced your purchasing choices.
2) Give an example of a shift in consumer and producer surplus. How did it affect the market efficiency? Please explain.
Purchase this Solution
Solution Summary
An example of a shift in consumer and producer surplus is illustrated.
Solution Preview
Please see the attached file.
1) The government will tax a good for various reasons, resulting in a fall in equilibrium quality while the prices rise. Could someone explain how price controls and taxes have influenced your purchasing choices?
Solution:
Governments all over the world try to keep prices low by setting maximum legal prices. A maximum legal price (price ceiling) is the highest price at which the government allows people to buy or sell a good. Price ceiling set below the market price will have a considerable impact on the market & there will shortage of goods. Because ceiling price is lower than the market equilibrium price & at that price demand will be more than the ...
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.