The figure shows the competitive market for milk.
-In the figure above, when the quantity of milk produced is 600 gallons per day, what is the deadweight loss?
A) $250
B) $125
C) $500
D) $50

Question

The figure shows the competitive market for milk.
-In the figure above, when the quantity of milk produced is 600 gallons per day, what is the deadweight loss?
A) $250 
B) $125 
C) $500 
D) $50

Quizplus · Accepted Answer

The deadweight loss is the triangle formed by the supply curve, the demand curve, and the equilibrium price. In this case, the deadweight loss is $250.

The Figure Shows the Competitive Market for Milk