Multiple Choice
The market for plywood (a sheet of wood used in construction) is characterized by the following demand and supply equations: QD = 800 - 10P and QS = 50P - 1,000, where P is the price per sheet of plywood and Q measures the quantity of plywood. What is the size of the deadweight loss if the government imposes a price ceiling of $25 per sheet of plywood?
A) $3,750
B) $4,418
C) $6,000
D) $8,900
Correct Answer:
Verified
Correct Answer:
Verified
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