Practise using elasticity values and diagrams to compare consumer and producer surplus changes after taxes, price controls and market interventions.
There are 10000 tickets available to watch a sports final at a national stadium. The initial market equilibrium ticket price is $ 20. The government decides to fix an effective minimum price for the tickets.
Under which conditions will the consumer surplus for the tickets decrease the most as a result of the minimum price?
minimum
price level
$
price elasticity
of demand
for tickets
18
-0.5
18
-1.5
22
-0.5
22
-1.5
C