The Ministry of Misallocation has decreed that the production of widgets must be 5000 each month and the production of gizmos must be 8000 each month. Calculate the deadweight loss in each market caused by these restrictions. Please note the scale of the quantity axis is in thousands. Price of widgets Price of gizmos $10 s100, 9 90 Supply Supply 8 80 7 70 6 60 50 4 40 Demand 3 30 Demand 2 20 1 10 0 1 2 3 4 5 6 7 8 9 10 0 2 4 6 8 10 12 14 16 18 20 Quantity of widgets (in thousands) Quantity of gizmos (in thousands) What is the deadweight loss in the widgets market? What is the deadweight loss in the gizmos market? %24

The Ministry of Misallocation has decreed that the production of widgets must be 5000 each month and the production of gizmos must be 8000 each month. Calculate the deadweight loss in each market caused by these restrictions. Please note the scale of the quantity axis is in thousands. Price of widgets Price of gizmos $10 s100, 9 90 Supply Supply 8 80 7 70 6 60 50 4 40 Demand 3 30 Demand 2 20 1 10 0 1 2 3 4 5 6 7 8 9 10 0 2 4 6 8 10 12 14 16 18 20 Quantity of widgets (in thousands) Quantity of gizmos (in thousands) What is the deadweight loss in the widgets market? What is the deadweight loss in the gizmos market? %24

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 53P: Table 3.8 shows information on the demand and supply for bicycles, where the quantities of bicycles...

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