Exhibit 7-11
-Refer to Exhibit 7-11. If the government limited wheat output to 3 million bushels, the deadweight loss would be illustrated by area
A)A.
B)D.
C)C.
D)E.
E)B.

Question

Exhibit 7-11 
-Refer to Exhibit 7-11. If the government limited wheat output to 3 million bushels, the deadweight loss would be illustrated by area
A)A. 
B)D. 
C)C. 
D)E. 
E)B.

Quizplus · Accepted Answer

Deadweight loss occurs when the market equilibrium is distorted, leading to a loss in economic efficiency. In the context of limiting wheat output to 3 million bushels, the deadweight loss would be represented by the area that captures the lost surplus due to the restriction on output, which is typically the area between the supply and demand curves over the restricted quantity range. Without the specific exhibit, the correct answer relies on understanding that deadweight loss is the area that represents the lost welfare or efficiency in the market due to the output limit. Since the question and choices are abstract without the exhibit, the explanation is based on standard economic principles.

Exhibit 7-11 -Refer to Exhibit 7-11. If the Government Limited Wheat Output