-Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers,as indicated by the supply schedule SM ?w?th s?bs?d??.
The overall deadweight welfare loss to Mexico equals:

Question

Quizplus · Accepted Answer

The deadweight welfare loss is the triangle formed by the difference between the equilibrium price with and without the subsidy. The height of the triangle is $200, and the base is 2 tons. Therefore, the area of the triangle is $200 * 2 / 2 = $200.