Assume that a price ceiling is imposed and there is no black market in gasoline. Compare the economic surplus in this market when there is no price ceiling to when there is a price ceiling. The price ceiling creates
A. new surplus equal to the area under the demand curve and above the supply curve for units between the quantity with the price ceiling and the equilibrium quantity.
B. a deadweight loss equal to the area under the demand curve and above the supply curve for units up to the quantity with the price ceiling.
C. new surplus equal to the area under the demand curve and above the supply curve for units up to the equilibrium quantity.
D. a deadweight loss equal to the area under the demand curve and above the supply curve for units between the quantity with the price ceiling and the equilibrium quantity.

The answer is: B) a deadweight loss equal to the area under the demand curve and above the supply curve for units up to the quantity with the price ceiling.

Explanation:

A price ceiling prevents the price of a good or service from reaching its equilibrium price (the price is set artificially low), which will result in a decrease of the quantity supplied and an increase in the quantity demanded. Price ceilings make markets less efficient, for example, price ceiling set as rent control will tend to lower the quantity of units offered for rent or lower the quality of the units offered for rent.