-In the above figure, if output is 30 units, then the total deadweight loss is
A) $60.
B) $5.
C) $10.
D) $20.

Question

-In the above figure, if output is 30 units, then the total deadweight loss is
A) $60. 
B) $5. 
C) $10. 
D) $20.

Quizplus · Accepted Answer

The deadweight loss is calculated as the area of the triangle formed by the loss in consumer and producer surplus due to a market distortion, such as a tax. In this case, without the specific figure, the general approach to find deadweight loss involves identifying the area of the triangle formed by the price difference and the quantity difference. The correct answer typically involves calculating this area, which often involves 1/2 * base * height for a triangle. Given the options and assuming a standard setup where the output is reduced due to a tax or similar distortion, a deadweight loss of $10 could be seen as reasonable, assuming the base and height of the triangle formed by the distortion lead to an area of 10. This is a common outcome in simplified economic models where taxes or other interventions lead to a reduction in the quantity sold and bought in the market.

-In the Above Figure, If Output Is 30 Units, Then