The following figure depicts the demand and the supply for a certain good.

-Refer to the figure above.What kind of price control would induce an excess supply and create a deadweight loss of $2,500?

Question

The following figure depicts the demand and the supply for a certain good.
 
-Refer to the figure above.What kind of price control would induce an excess supply and create a deadweight loss of $2,500?

Quizplus · Accepted Answer

A price floor set above the equilibrium price, such as at $175, would lead to excess supply as it prevents the market from clearing, resulting in a deadweight loss.

The Following Figure Depicts the Demand and the Supply for a Certain