Question

Government is lobbied to institute price controls because: Multiple Choice

Answer 1

Answer:

people care more about their own surplus than they do about total surplus. 

Explanation:

Price control can either be a price ceiling or a price floor.

A price ceiling is when the government or an agency of the government sets the maximum price for a good or service. It is usually set below equilibrium price.

Price ceiling increase consumer surplus and reduce producer surplus.

A price floor is when the government or an agency of the government sets the least price a good or service can be sold. It is usually set above equilibrium price.

Price floor increases producer surplus and reduces consumer surplus.

Producers would be advocating for a price floor because it increases their surplus, while, consumers would advocate for a price ceiling.

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the product.

Producer surplus is the difference between the price of a product and the least price the seller is willing to sell the product.

I hope my answer helps you