Suppose the city of austin, tx chooses to regulate the number of street vendors operating near the university of texas by requiring each vendor to own a permit in order to operate. the city gives free permits to all existing vendors and announces that no new permits will ever be issued. prior to regulation, the costs (including implicit costs) of operating were $85,000 and revenues were $150,000. the city ordinance allows the permits to be bought and sold without restriction. the permits have no expiration date. the interest rate is 10 percent. after regulation, existing street vendors earn an
a. accounting profit of zero.
b. economic profit of $130,000.
c. economic rent of $65,000
d. economic loss.

Consider the market for gasoline. suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon, and employees at gas stations earn $17.50 per hour. complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market. statement price control effect the government has instituted a legal minimum price of $3.40 per gallon for gasoline. the government prohibits gas stations from selling gasoline for more than $3.40 per gallon. due to new regulations, gas stations that would like to pay better wages in order to hire more workers are prohibited from paying more than $14.50 per hour.