CS 10.1 Pr Cntrls PdctSurp_Conclusions

CS 10.1 Pr Cntrls PdctSurp_Conclusions - depends on the...

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CLASS SUPPLEMENT # 10.1 EFFECTS OF PRICE CONTROLS ON PRODUCER SURPLUS If neither demand nor supply is perfectly elastic or perfectly inelastic: C An effective price floor may or may not enlarge TPS. Because the price effect is positive and the quantity effect is negative, their combined net effect on TPS
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Unformatted text preview: depends on the elasticities of demand and supply. C An effective price ceiling always reduces TPS. (Both the price effect and the quantity effects on TPS are negative.) D:\ECON202\CS\CS 10.1 Pr Cntrls PdctSurp_Conclusions.wpd...
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