-Refer to the diagram above.Assume that a price ceiling is imposed at point G,i.e. ,the price is now represented by the distance 0G.The deadweight loss due to the price ceiling is represented by the area
A) FEC.
B) DAC.
C) GJECF.
D) GJEF.
E) (JAE + DG

Question

-Refer to the diagram above.Assume that a price ceiling is imposed at point G,i.e. ,the price is now represented by the distance 0G.The deadweight loss due to the price ceiling is represented by the area
A) FEC. 
B) DAC. 
C) GJECF. 
D) GJEF. 
E) (JAE + DG

Quizplus · Accepted Answer

The deadweight loss due to a price ceiling is the loss in total surplus, which is represented by the area between the supply and demand curves that is no longer traded. In this case, it is the area FEC.

-Refer to the Diagram Above