Suppose that demand in the market for economics books is and supply is .
Suppose that the government imposed a ₹ 100 ceiling on economics books in the above question. The 'deadweight-loss' from this policy is
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JNU SIS 2015 Question 18: Perfect competition
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Suppose that demand in the market for economics books is Q_D = max {0, 3000 - 4P} and supply is Q_S = max {0, -1000 + 12P}. Suppose that the government imposed a ₹ 100 ceiling on economics books in the above question. The 'deadweight-loss' from this policy is (A) 500000/3 (B) 620000/3 (C) 700000/3 (D) None of the above
Perfect competition has come up 115 times in 7 exams since 2006.
What this question tests
This question is on Price ceilings, floors and subsidies, part of Perfect competition in Microeconomics.
What binding and non-binding price controls and per-unit subsidies do to quantity, shortage and cost.
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