Use the following to answer questions 20-21:
Figure 3.7
-(Figure 3.7) At a price ceiling of $8, there is a shortage of _____ and a deadweight loss of _____.
A) 200 pounds; $1,200
B) 500 pounds; $400
C) 300 pounds; $600
D) 300 pounds; $300

Question

Use the following to answer questions 20-21:
Figure 3.7 
-(Figure 3.7) At a price ceiling of $8, there is a shortage of _____ and a deadweight loss of _____.
A) 200 pounds; $1,200 
B) 500 pounds; $400 
C) 300 pounds; $600 
D) 300 pounds; $300

Quizplus · Accepted Answer

The correct answer is D because at a price ceiling of $8, the quantity demanded is 1,100 pounds and the quantity supplied is 800 pounds, resulting in a shortage of 300 pounds. The deadweight loss is the area of the triangle formed by the difference between the equilibrium price and the price ceiling, which is $300.

Use the Following to Answer Questions 20-21