1-Let's measure consumer surplus if the government imposes price controls and goods endup being randomly allocated among those consumers willing to pay the controlled price. If the demand and supply curves are as in the figure, then:

a.What is consumer surplus under the price control? b.What would consumer surplus be if the quantity suppliedwere 1,000 but the goods were allocated tothe highest-value users?

Price $110 100 Supply Controlled 10 - - price Demand 1,000 4,000 Quantity