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?

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter16: Externalities, The Environment, And Natural Resources

Section: Chapter Questions

Problem 4DQ

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