In the Market for Used Cars, the Demand and Supply

question 69

Multiple Choice

In the market for used cars, the demand and supply equations are given by Q^D = 12,000 - 0.4P and Q^S = 0.1P + 5,000, where P is the price per car and Q measures the quantity of cars. What is the size of the deadweight loss at a price floor of $15,000?

• A) $250,000
• B) $500,000
• C) $750,000
• D) $1 million

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Definitions:

Items of Value

Items of Value refer to any objects or entities that hold financial, sentimental, or practical worth to an individual or organization.

Public Policy

Principles and standards considered by governmental bodies as being of the utmost importance for the welfare and protection of the general public.

Governmental Policy

The strategies, plans, and actions undertaken by a government to achieve its objectives.

Societal Values

The commonly held standards, ethics, and moral principles that govern behavior and actions within a society.