Scenario: Vacant Houses, Foreclosed or Abandoned, Are Typically Boarded Up

Multiple Choice

Scenario: Vacant houses, foreclosed or abandoned, are typically boarded up with plywood that many people consider unsightly and likely to invite vandalism. An alternative is clear plastic (polycarbonate) panels. The figure below shows the demand and the supply of polycarbonate panels used for boarding up houses in a hypothetical town. Suppose that there are 140 houses that are vacant and the town council makes it illegal to use plywood to board them up, leaving only polycarbonate panels as an alternative. To answer some of the questions below, it will be useful to find the equations of the three lines in the figure.

-Refer to the scenario above.What is the deadweight loss associated with the council's action relative to the socially efficient outcome?

A) $400
B) $900
C) $1,200
D) $1,600