-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect,deadweight loss equals ________.
A) $1,600,000
B) $200,000
C) $800,000
D) $1,800,000
E) $400,000

Question

-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect,deadweight loss equals ________.
A) $1,600,000 
B) $200,000 
C) $800,000 
D) $1,800,000 
E) $400,000

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price creates a shortage, reducing the quantity of DVDs sold. The deadweight loss is the loss in total surplus due to this inefficiency, calculated as the area of the triangle formed between the supply and demand curves at the new quantity sold.

-The Above Figure Shows the Market for DVDs