Which of the following statement is true: a. There can never be price ceiling and price floor that are simultaneously binding in the same market. b. Since the subsidy increases both consumer surplus and producer surplus, subsidy does not create any

Essentials of Economics (MindTap Course List)
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ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
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  1. Which of the following statement is true:
a. There can never be price ceiling and price floor that are simultaneously binding in the same market.
b. Since the subsidy increases both consumer surplus and producer surplus, subsidy does not create any deadweight loss.
c. None of the other answers is correct.
d. The economic incidence of the tax depends on who must legally pay the tax.
e. In general, the burden of the tax falls on the more elastic side of the market.
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