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-(Figure: The Market for Hybrid Cars) Use Figure: The Market for Hybrid Cars.What area represents deadweight loss if there is a binding price floor at P₁?

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Use the following to answer question:

-(Figure: The Market for Hybrid Cars) Use Figure: The Market for Hybrid Cars.What area represents deadweight loss if there is a binding price floor at P₁?

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A binding price floor set above the equilibrium price results in a surplus, reducing the quantity sold to below the equilibrium quantity. The deadweight loss is represented by the area of lost transactions, which is c + e.

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