Question

Government is lobbied to institute price controls because: Multiple Choice

they tend to increase total producer surplus and consumer surplus.
people care more about their own surplus than they do about total surplus.
people care more about total surplus than they do about their own surplus.
they reduce producer surplus, but they raise consumer surplus more than enough to compensate.

Answer 1

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

Step-by-step 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