The Figure Shows the Supply Curve (S) and the Demand

question 437

Multiple Choice

The figure shows the supply curve (S) and the demand curve (D) for college education. The external benefit from college education is $6,000 per student per year and is constant.
-In the figure above, with no government involvement and if the colleges are competitive, what is the deadweight loss?

• A) $12 billion per year
• B) $6 billion per year
• C) $4 billion per year
• D) zero

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