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Unformatted text preview: participant in a competitive market it’s “led by an invisible hand” Markets can be inefficient in face of: price/quantity regulations, taxes & subsidies, externalities, monopoly Deadweight loss – decrease I total surplus and that results from an inefficient underproduction or overproduction Overproduction – when the govt pays producers a subsidy Extracting circles - ??DEFINE CHAPTER 7 Price Ceilings & Floors Price ceiling or price cap – a govt regulation that places an upper limit on price of a Consumer surplus = A+D Producer surplus = B+C + E...
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This note was uploaded on 09/29/2009 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.
- Spring '07
- Consumer Surplus