Final answer:
To identify and calculate surplus reallocation due to a price ceiling, consider changes in consumer and producer surplus. A price ceiling of $400 reallocates surplus V from producers to consumers, with the new consumer surplus being T + V and producer surplus being X. The process also introduces a deadweight loss, reducing total economic efficiency.
Step-by-step explanation:
To identify and calculate how surplus is reallocated when a price ceiling is imposed, you can look at changes to consumer surplus and producer surplus in a demand-supply model. In the provided scenario, the original equilibrium price is $600 with a quantity of 20,000, and the consumer surplus is T + U, while the producer surplus is V + W + X. When the price ceiling of $400 is introduced, the market adjusts to a quantity of 15,000, changing the consumer surplus to T + V, and producer surplus to X. Here, the surplus V is transferred from producers to consumers as a result of the price ceiling. To calculate, you could add the values of areas T + V for the new consumer surplus and X for the new producer surplus, comparing them to the old surpluses to measure the reallocation.
A second change from the price ceiling is that it causes a deadweight loss, indicating economic inefficiency. The gain to consumers (T + V) is less than the loss to producers (V + W), which can be seen by comparing the new surpluses with the original surpluses. This loss represents the reduction in total surplus (T + U + V + W + X) due to the price ceiling.