Use the following to answer questions:
Figure: Supply and Demand 2
-(Figure: Supply and Demand 2) If the government sets the price at $8 in this figure, the total value of the wasted time is:
A) $36.
B) $48.
C) $64.
D) $8.

Question

Use the following to answer questions:
Figure: Supply and Demand 2 
-(Figure: Supply and Demand 2) If the government sets the price at $8 in this figure, the total value of the wasted time is:
A) $36. 
B) $48. 
C) $64. 
D) $8.

Quizplus · Accepted Answer

The wasted time is the area of the triangle formed by the equilibrium price and quantity and the price ceiling. The base of the triangle is 4 units, and the height is $2. So the area is (1/2) * 4 * 2 = $4. The total value of the wasted time is 4 * $4 = $16.

Use the Following to Answer Questions