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Figure: Price Ceilings and Random Allocation
-(Figure: Price Ceilings and Random Allocation) Refer to the figure. When a controlled price is imposed and the quantity of goods is allocated randomly between the highest-valued uses and lowest-valued uses, loss due to random allocation instead of allocation to the highest-valued use is represented by area:
A) A.
B) B.
C) C.
D) D.

Question

Use the following to answer questions:
Figure: Price Ceilings and Random Allocation 
-(Figure: Price Ceilings and Random Allocation) Refer to the figure. When a controlled price is imposed and the quantity of goods is allocated randomly between the highest-valued uses and lowest-valued uses, loss due to random allocation instead of allocation to the highest-valued use is represented by area:
A) A. 
B) B. 
C) C. 
D) D.

Quizplus · Accepted Answer

Area A represents the loss due to random allocation instead of allocation to the highest-valued use.

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