Suppose All Workers in a Certain Labor Market Are of Either

Multiple Choice

Suppose all workers in a certain labor market are of either high quality or low quality.Potential employers value a high-quality worker at $15,000 per month and a low-quality worker at $7,500 per month.The monthly supply of high-quality workers is Q^s_H = 0.04(W - 1,500) and the supply of low-quality workers is Q^s_L = 0.08(W - 1,500) ,where W is the monthly wage.If workers' abilities are not observable to employers,what is the deadweight loss due to asymmetric information?

A) $750,000
B) $1,500,000
C) $1,125,000
D) $500,000