Resource Supply/Demand The Following Questions Refer to the Accompanying Graph, Which Shows

Multiple Choice

Resource Supply/Demand

The following questions refer to the accompanying graph, which shows the supply and demand for a resource. The owner of the resource is receiving the price P₀ and is providing the quantity Q₀.



-Refer to Resource Supply/Demand.If the government confiscates the rent and pays the owner area D to supply Q₀ units of the resource at a zero price,then

A) area B + C is transferred from the resource owner to the government with no loss in social gain.
B) area A + B + C overestimates the social gain that will be created.
C) demanders will continue to receive area A + B + C + D in value from the resource.
D) a deadweight loss equal to area B + C will be created.