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Liam is willing to buy the last ticket to the avant premier of Star Wars for $15, while Alexander is willing to pay $20. Liam is first in line and buys a ticket for $15. Liam could sell his ticket to Alexander for $18, but he can't because of government regulation preventing the reselling of tickets. The regulation, then, is causing:

Respuesta :

sadddamkashmiri801

Answer:

Potential total surplus to increase.

Explanation:

As we know that:

Producer Surplus = Market value - Minimum price to sell

This means that for Liam:

Market value at which he can sell the ticket was $18 and the minimum price was $15

By putting values, we have:

Liam's surplus = $18 - $15 = $3

Now

Consumer Surplus = Consumer willing to Pay - Consumer Paid

For Alexander, the amount he was willing to pay was $20 and what he actually paid was $18 if the regulation hasn't intervened.

Alexander's surplus = $20 - $18 = $2

This means that the regulation prevents the increase in the potential total surplus and this has increased the dead weight loss of $5.

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