The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a voluntary production reduction program to achieve their goal. What is the size of the deadweight loss from the program?
A. $1.5 billion
B. $3 billion
C. $4.5 billion
D. $18 billion
A. $1.5 billion
Economics
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If a firm successfully price discriminates, it increases i. consumer surplus. ii. deadweight loss. iii. economic profit
A) i only B) ii only C) iii only D) i and iii E) i and ii
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Which is a determinant of supply?
a. Consumer income b. Tastes and preferences c. Production (resource) costs d. Number of consumers
Economics