Price ceilings can result in a net loss in consumer surplus when the ________ curve is ________
A) demand; very elastic
B) demand; very inelastic
C) supply; very inelastic
D) none of the above; price ceilings always increase consumer surplus
B
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A monopoly is inefficient because: a. consumers are forced to pay higher prices for products
b. firms are able to earn economic profits. c. the cost of increased production is less than the value that society places on it. d. price exceeds marginal revenue.
Consider the following statements:
a. Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area. b. Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment. c. Manufacturers produce less of a particular cell phone when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives? A) a only. B) b only. C) c only. D) a and b. E) a, b, and c.