In the market for used cars, the demand and supply equations are given by Qd= 12,000 - 0.4P and Qs= 0.1P+ 5,000, where P is the price per car and Q measures the quantity of cars. What is the size of the deadweight loss at a price floor of 15,000?

In the market for used cars, the demand and supply equations are given by Qd= 12,000 - 0.4P and Qs= 0.1P+ 5,000, where P is the price per car and Q measures the quantity of cars. What is the size of the deadweight loss at a price floor of 15,000?

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

In the market for used cars, the
demand and supply equations are
given by Qd= 12,000 - 0.4P and Qs=
0.1P + 5,000, where P is the price per
car and Q measures the quantity of
cars. What is the size of the
deadweight loss at a price floor of
15,000?

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