4. Consider the market for apples where demand is given by: Qd = 70-p and supply is given by: Qs = 40 + 2p Suppose that due to a market failure, only a maximum of 50 units of apples can be supplied. What is the amount of the deadweight loss caused by this market failure?

4. Consider the market for apples where demand is given by: Qd = 70-p and supply is given by: Qs = 40 + 2p Suppose that due to a market failure, only a maximum of 50 units of apples can be supplied. What is the amount of the deadweight loss caused by this market failure?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

4. Consider the market for apples where demand is given by:
Qd = 70-p
and supply is given by:
Qs = 40 + 2p
Suppose that due to a market failure, only a maximum of 50 units of apples can be supplied.
What is the amount of the deadweight loss caused by this market failure?

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