Suppose the U.S. government places a price ceiling on the sale of gasoline at $3 per gallon
Question:
a. How much of a shortage or surplus of gasoline would result?
b. Calculate the effects of this policy in terms of the changes in consumer surplus and producer surplus.
c. How much deadweight loss is created?
d. What would happen if the price ceiling is raised to $6 per gallon?
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a A price ceiling of 3 would create a shortage of 30 million 10 million 20 mil...View the full answer
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