Without any price control, the equilibrium price is $15. Then the government creates a price ceiling of $13. Which of the following is true?

a.The price control is binding and producer surplus rises.

b.The price control is not binding and producer surplus rises.

c.The price control is binding and producer surplus falls.

d.The price control is not binding and producer surplus does not change

T/F: price controls will always increase deadweight loss.

a.T.

b.F.

There is a price floor above the equilibrium price. The new equilibrium quantity sold in this market is

a.calculated by plugging the price floor into the supply function.

b.calculated by plugging the price floor into the demand function.

c.calculated by setting supply and demand equal to each other.

d.none of the above.