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E202Exam2.4 - c Calculate and graph the total economic...

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5. Refer to Problem 4. Suppose a price ceiling of $2 is placed on the market for gasoline. a. Calculate the shortage of gasoline that will result from this policy. b. Calculate and graph consumer surplus, producer surplus, and total economic surplus. Would producers support the price ceiling? Would consumers support the price ceiling?
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Unformatted text preview: c. Calculate and graph the total economic surplus lost as a result of the price ceiling. d. Is it possible for consumer surplus to fall in response to a price ceiling? Explain....
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