(Hint: To find the area of the quadrilateral, select the shaded region.) The total consumer surplus is € True or False: Price controls eliminate mis-allocation of resources. O True O False
(Hint: To find the area of the quadrilateral, select the shaded region.) The total consumer surplus is € True or False: Price controls eliminate mis-allocation of resources. O True O False
Chapter7: Market Efficiency And Welfare
Section: Chapter Questions
Problem 5P
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Question
9. Misallocation of Resources
Assume the following graph shows the market for electricity in an economy. Worried that high prices will harm the consumers of electricity, lawmakers decide to impose a price ceiling of €1 per unit.
On the following graph, use the green quadrilateral (triangle symbols) to shade the area representing the total consumer surplus (CS).
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