Use the following to answer questions:
Figure: Market I
-(Figure: Market I) Look at the figure Market I. A price floor at $15 would result in deadweight loss of:
A) $9.
B) $10.
C) $20.
D) $40.50.

Question

Use the following to answer questions:
Figure: Market I 
-(Figure: Market I) Look at the figure Market I. A price floor at $15 would result in deadweight loss of:
A) $9. 
B) $10. 
C) $20. 
D) $40.50.

Quizplus · Accepted Answer

A price floor set above the equilibrium price creates a surplus and reduces the quantity traded, leading to a deadweight loss. The deadweight loss is the loss in total surplus, which can be calculated based on the difference between the quantity supplied and quantity demanded at the price floor.

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