| Question |
Figure shows how a price ceiling affects consumer and producer surplus in the competitive market for guitar lessons. Suppose instead that Figure (and all of the numbers in it) depicts the competitive market for tickets to rock concerts by local bands. Further, when the city imposes a $15 price ceiling, black markets develops in which ticket scalpers buy up all of the tickets available, and sells them all at the highest single price that the market will bear. Draw a graph and identify areas for each of the following after the price ceiling is imposed: a. Consumer surplus b. Producer surplus c. Ticket scalpers’ revenue. d. Deadweight loss |
