1.4. Let's measure consumer surplus if the govern ment imposes price controls and goods ended up being...

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1.4. Let's measure consumer surplus if the govern ment imposes price controls and goods ended up being randomly allocated among those consumers willing to pay the controlled price. If the demand and supply curves are as in the figure below, then:

Controlled price 1000 4000 Quantity

a. What is consumer surplus under the price control?

b. What would consumer surplus be if the quantity supplied were 1,000 but the goods were allocated to the highest-value users?

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Modern Principles Macroeconomics

ISBN: 124428

2nd Edition

Authors: Tyler Cowen ,Alex Tabarrok

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Question Posted: Nov 16, 2024 12:00 AM

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Modern Principles Macroeconomics

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