Let’s measure consumer surplus if the government imposes price controls and goods ended up being randomly allocated among those con sumers willing to pay the controlled price. If the demand and supply curves are as in the figure below, then: jc4

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?

Transcribed Image Text:

Price $110 100 Controlled price 10 Supply Demand 1000 4000 Quantity