This topic contains a solution. Click here to go to the answer

Author Question: The above figure shows supply and demand curves for milk. In an effort to help farmers, the ... (Read 645 times)


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

Chou

  • Sr. Member
  • ****
  • Posts: 335

Lobcity

  • Hero Member
  • *****
  • Posts: 524


The above figure shows the demand and supply curves in the market for milk. Currently the market is in equilibrium. If the government establishes a $2 per gallon price ceiling to ensure that children are nourished, estimate the change in p, Q, and social welfare.



Kingjoffery

  • Sr. Member
  • ****
  • Posts: 332
At a price of $2, only 500 gallons are produced.
The deadweight loss equals [(1000 - 500) ∗ (4 - 2)]/2 = $500.



 

Did you know?

Since 1988, the CDC has reported a 99% reduction in bacterial meningitis caused by Haemophilus influenzae, due to the introduction of the vaccine against it.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

Did you know?

The first-known contraceptive was crocodile dung, used in Egypt in 2000 BC. Condoms were also reportedly used, made of animal bladders or intestines.

For a complete list of videos, visit our video library