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Figure: Losses from Price Ceilings
-(Figure: Losses from Price Ceilings) Refer to the figure. A price ceiling of $1 causes lost consumer surplus equal to area ________, and lost producer surplus equal to area ________.
A) c; e
B) bc; de
C) a; f
D) d; b

Question

Use the following to answer questions:
Figure: Losses from Price Ceilings 
-(Figure: Losses from Price Ceilings) Refer to the figure. A price ceiling of $1 causes lost consumer surplus equal to area ________, and lost producer surplus equal to area ________.
A) c; e 
B) bc; de 
C) a; f 
D) d; b

Quizplus · Accepted Answer

The correct answer is A because the lost consumer surplus is equal to the area below the demand curve and above the price ceiling, which is area c. The lost producer surplus is equal to the area above the supply curve and below the price ceiling, which is area e.

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