The Graph Shown Portrays a Subsidy to Buyers

question 79

Multiple Choice

The graph shown portrays a subsidy to buyers. What is the deadweight loss that arises from this subsidy?

• A)$400
• B)$3,600
• C)$750
• D)$800

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Definitions:

Price Quotations

Refers to the latest price at which an asset or service is traded between buyers and sellers or is offered to be bought or sold.

Observable Inputs

Inputs that are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use when pricing the asset or liability.

Level 2 Input

In fair value measurement, inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, such as using market-correlated data.

Level 2 Input

Inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, directly or indirectly, such as quoted prices for similar assets or liabilities.