-The Above Figure Shows Supply and Demand Curves for Milk

question 41

Multiple Choice

-The above figure shows supply and demand curves for milk. In an effort to help farmers, the government passes a law that establishes a $3 per gallon price support. The loss in social welfare resulting from this price support equals

• A)k + i.
• B)j.
• C)[$3 ∗ ( - )] - h.
• D)$3 ∗ k.

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Definitions:

Sensitivity

The degree to which a system's output depends on the input or how changes in input can affect the output in modeling and analysis.

Subjectivity

Subjectivity pertains to how someone's judgment is shaped by personal opinions and feelings instead of external facts or evidence.

Centre-of-Gravity

A method in location analysis that finds the best location for a facility based on minimizing transportation costs, taking into account the geographical distribution of supply and demand.

Tonnes

A metric unit of mass equal to 1,000 kilograms or approximately 2,204.6 pounds.