Total surplus and allocative inefficiency due to governemt regulation of
Concept introduction:
Economic Regulation- The government imposed restrictions on a firm decisions over the price, quantity and entry and exit.
Price Ceiling- It is the government imposed price control or the maximum price that can be charged for an output. It is a government control aimed at protecting the consumers against the market exploitation/manipulation by the monopolists, duopolists and oligopolists.
Dead weight loss- The fall in the total surplus consequent upon a market distortion like governemnt regulation like price ceiling,
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