-The above figure shows supply and demand curves for milk.In an effort to help farmers,the government passes a law that establishes a $3 per gallon price support.The loss in social welfare resulting from this price support equals

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The loss in social welfare resulting from this price support equals [$3 ∗ (Q₂ - Q₁)] - h.The price support creates a surplus of milk, which is the difference between Q₂ and Q₁. The government must purchase this surplus at the support price of $3 per gallon, which costs taxpayers $3 ∗ (Q₂ - Q₁). In addition, the price support reduces consumer surplus by h. The total loss in social welfare is therefore [$3 ∗ (Q₂ - Q₁)] - h.

-The Above Figure Shows Supply and Demand Curves for Milk