The Ministry of Misallocation has decreed that the production of widgets must be 2000 each month and the production of gizmos must be 14000 each monthCalculate the deadweight loss in each market caused by these restrictions. Please note the scale of the quantity axis is in thousands.Price of widgets$10987654321Supply0Demand1 2 3 4 5 6 7 8 9 10Quantity of widgets (in thousands)A4.000 in widgets and 180,000 in gizmosOB. 8,000 in widgets and 160.000 in gizmosOC 16,000 in widgets and 300,000 in gizmosOD. 16,000 in widgets and 320.000 in gizmosOE4,000 in widgets and 360,000 in gizmosPrice of gizmos$1009080706050403020100SupplyDemand2 4 6 8 10 12 14 16 18 20Quantity of gizmos (in thousands).

The Ministry of Misallocation has decreed that the production of widgets must be 2000 each month and the production of gizmos must be 14000 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 $100 9 8 7 6 1 Supply Demand 0 1 2 3 4 5 6 7 8 9 10 Quantity of widgets (in thousands) A4.000 in widgets and 160,000 in gizmos OB.8,000 in widgets and 160,000 in gizmos OC 16,000 in widgets and 300,000 in gizmos OD. 16,000 in widgets and 320,000 in gizmos OF 4.000 in widgets and 360,000 in gumos 90 80 70 60 50 40 30 20 10 0 Supply Demand 2 4 6 8 10 12 14 16 18 20 Quantity of gizmos (in thousands).

The Ministry of Misallocation has decreed that the production of widgets must be 2000 each month and the production of gizmos must be 14000 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 $100 9 8 7 6 1 Supply Demand 0 1 2 3 4 5 6 7 8 9 10 Quantity of widgets (in thousands) A4.000 in widgets and 160,000 in gizmos OB.8,000 in widgets and 160,000 in gizmos OC 16,000 in widgets and 300,000 in gizmos OD. 16,000 in widgets and 320,000 in gizmos OF 4.000 in widgets and 360,000 in gumos 90 80 70 60 50 40 30 20 10 0 Supply Demand 2 4 6 8 10 12 14 16 18 20 Quantity of gizmos (in thousands).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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