A political leader comes to you and wonders from whom she will get the most complaints if she institutes a price ceiling when demand is inelastic and supply is elastic. a. How do you respond? Producers will likely complain the most because they are forced to limit the quantity supplied. This decrease leads to lower revenues and hence lower profits. Relative elasticities don’t matter. Although consumers will pay a lower price with the price ceiling, fewer trades will occur. Consumers will likely complain the most because the inelastic demand suggests consumers have few alternatives. Consumers will likely complain the most because their inelastic demand leads to a much higher quantity demanded with a price ceiling. This increased quantity demanded cannot be met because suppliers lower their output when a price ceiling is put in place. Producers will likely complain the most because a price ceiling is an implicit tax on producers and an implicit subsidy to consumers. Some producer surplus is transferred to consumers. Relative elasticities don’t matter.