Suppose the Market Demand Function in a Certain Market Where

question 46

Multiple Choice

Suppose the market demand function in a certain market where Q is measured in thousands of units is Q^d = 20 - 2.5P,and the market supply function is Q^s = 2.5P - 7.5.How much deadweight loss would there be in this market if the quantity bought and sold was 8,500 units?

• A) $2.03
• B) $4.05
• C) $1,800
• D) $2,025

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Definitions:

Drunk Drivers

Individuals who operate a vehicle while under the influence of alcohol, significantly increasing the risk of accidents and impairments in judgement and coordination.

Proportion

A part, share, or number considered in comparative relation to a whole.

Independent

Not influenced or controlled by others; acting freely.

P(A|B)

The likelihood of event A happening provided that event B has taken place.