Use the figure below to answer the following questions. Figure 5.3.2
-Refer to Figure 5.3.2.If the level of output is 100 units,the deadweight loss is area
A)BCF.
B)ACG.
C)DCE.
D)ACH.
E)HCG.

Question

Use the figure below to answer the following questions.  Figure 5.3.2
-Refer to Figure 5.3.2.If the level of output is 100 units,the deadweight loss is area
A)BCF. 
B)ACG. 
C)DCE. 
D)ACH. 
E)HCG.

Quizplus · Accepted Answer

The deadweight loss is the area of the triangle BCF. This is because the deadweight loss is the loss of consumer and producer surplus that occurs when the market is not in equilibrium. In this case, the market is not in equilibrium because the price is above the equilibrium price, which means that there is a surplus of goods. The deadweight loss is the area of the triangle BCF because this is the area that represents the loss of consumer and producer surplus.

Use the Figure Below to Answer the Following Questions