Figure 4-9 Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at P f .
-Refer to Figure 4-9. What area represents the deadweight loss after the imposition of the price floor?

Question

Figure 4-9  Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at P f .
-Refer to Figure 4-9. What area represents the deadweight loss after the imposition of the price floor?

Quizplus · Accepted Answer

The deadweight loss is the loss of consumer and producer surplus that results from the imposition of a price floor. In Figure 4-9, the deadweight loss is represented by the area C + D.

Figure 4-9 Figure 4-9 Shows the Demand and Supply