450 cer 400 350 Q, a 9) The above figure shows supply and demand curves for appl

Question

450 cer 400 350 Q, a 9) The above figure shows supply and demand curves for apples. If the government creates a price target of $450, the deadweight loss is (note: B) j we discussed price targetin class): A) f+g 10) The above figure shows supply and demand curves for apples. If the government creates a price supportf $450, the deadweight loss is (note: we discussed price support in class): A) j B) f+g 11) The above figure shows supply and demand curves for apples. If the government creates a price ceiling of $450, the deadweight loss is: A) zero B) j C) fgtitjtk

Explanation / Answer

9)Target price price floor which implies that supplier cant charge below this price. If price target is $450 then quantity demanded is Q1 and quantity supplied is Q2. Hence Q1 will be supplied at $450. The portion that is not included with this outcome which were included in efficient are f and g.

hence f+g is correct.

10) In price support government buys at $450 price from sellers and sell at equilibrium price to consumers. Hence the whole deadweight loss is f.g,i,j,k

option c is correct.

11) Price ceiling is the price above which seller cant sell. If it is $450 then sellers will sell at $400 because the equilibrium price is lower than ceiling. At this there is no loss

hence zero is correct answer.

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