-The above figure shows a housing market with a rent ceiling equal to $1,000. In this figure, what area is equal to the deadweight loss?

Question

Quizplus · Accepted Answer

The deadweight loss in a market with a price ceiling (such as a rent ceiling) is represented by the area that includes the lost surplus to both consumers and producers due to the price ceiling. This area typically lies between the supply and demand curves, from the price ceiling to the equilibrium price. Area C captures this concept, as it represents the transactions that would have occurred in the absence of the price ceiling but are now lost, leading to inefficiency in the market.

-The Above Figure Shows a Housing Market with a Rent