What will be the deadweight loss if the firm depicted in the graph is regulated and...
What will be the deadweight loss if the firm depicted in the graph is regulated and allowed to earn a normal profit?
| a. | ½ (P1P2 x Q2Q3) | b. | ½ (P1P4 x Q1Q3) |
|---|---|---|---|
| c. | Zero | d. | ½ (P1P5 x 0Q3) |
Homework Answers
The firm earns normal or zero economic profit when the price equals the average total cost. The dead weight loss is show by the small traingle P1P2 Q2 Q3. The area is calculated by the given formula.
.
base.
height.
So we put
Ans: a).
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What will be the deadweight loss if the firm depicted in the
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JUST THE QUESTION 16 PLEASE THE FINAL PART OF C IS DEADWEIGHT LOSS AND COMPARE THEM...
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LOSS AND COMPARE THEM WITH YOUR FINDINGS ON A
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