Q1. The city council realizes that the telephone company could curtail pay phone service in response to the ceiling. To prevent this, the council plans to impose a requirement that the telephone company must maintain the current number of pay phones. In light of this additional restriction, what will be the likely impact of the price ceiling?

Q2. At the market-clearing price and quantity of $30 per hour and 4000 hours of gardening services, we can say that

a) Economic surplus could be increased at a higher price because firms would generate more revenue.
b) The market is efficient because the government has imposed a market-clearing price and quantity.
c) Economic surplus could be increased at a lower price because there would be more value to consumers.
d) The market is inefficient because there are some consumers who are not purchasing at this price.
e) Economic surplus is maximized and the market is efficient.