In a particular market, 3,000 products are sold every month. A new government policy restricts the quantity sold to 2,500. This allows sellers of the product to raise prices, increasing producer surplus in the market by $7,000, but decreasing consumer surplus by $9,000. What is the deadweight loss associated with the policy?
In a particular market, 3,000 products are sold every month. A new government policy restricts the quantity sold to 2,500. This allows sellers of the product to raise prices, increasing producer surplus in the market by $7,000, but decreasing consumer surplus by $9,000. What is the deadweight loss associated with the policy?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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In a particular market, 3,000 products are sold every month. A new government policy restricts the quantity sold to 2,500. This allows sellers of the product to raise prices, increasing producer surplus in the market by $7,000, but decreasing consumer surplus by $9,000. What is the deadweight loss associated with the policy?
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