Final answer:
Both price ceilings and price floors decrease the number of transactions in a market, because they cause a discrepancy between the quantity demanded and the quantity supplied. This leads to a decrease in consumer surplus and social surplus, with the correct answer being 'd) Decrease; decrease consumer surplus'.
Step-by-step explanation:
When considering the impact of a price ceiling on the number of transactions in a market, it helps to think about the quantities demanded (Qd) and supplied (Qs). A price ceiling sets the maximum price that can be charged for a product, which is typically below the market equilibrium price. As a result, Qd will exceed Qs, but since only Qs amount of the product can actually be sold, the number of transactions will decrease to the quantity supplied. On the other hand, a price floor imposes a minimum price above market equilibrium, leading to a situation where Qd is less than Qs. Since the limit on transactions in this scenario is determined by demand, the number of transactions will decrease to the quantity demanded. This leads to a decline in social surplus because consumers experience greater losses from the raised prices than the benefits received by producers.
The correct answer to the question would be 'd) Decrease; decrease consumer surplus' because both price ceilings and floors reduce the number of transactions and consumer surplus.