As the result of a price ceiling, the producer surplus reduced from Rs 1,000 to Rs 500 and consumer surplus reduced from Rs 2,000 to Rs 1,200. The deadweight loss is _____.

Rs 300

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Rs 500

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Rs 800

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Rs 1300

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Solution

The correct option is D Rs 1300
DWL is loss in total surplus resulting from the price ceiling. Loss of producer surplus = Rs 1000 - Rs 500 = Rs 500. Loss of consumer surplus = Rs 2,000 - Rs 1,200 = Rs 800. DWL = Rs 500 + Rs 800 = Rs 1300

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As the result of a price ceiling, the producer surplus reduced from Rs 1,000 to Rs 500 and consumer surplus reduced from Rs 2,000 to Rs 1,200. The deadweight loss is _____.

The correct option is D Rs 1300DWL is loss in total surplus resulting from the price ceiling. Loss of producer surplus = Rs 1000 - Rs 500 = Rs 500. Loss of consumer surplus = Rs 2,000 - Rs 1,200 = Rs 800. DWL = Rs 500 + Rs 800 = Rs 1300

The correct option is D Rs 1300
DWL is loss in total surplus resulting from the price ceiling. Loss of producer surplus = Rs 1000 - Rs 500 = Rs 500. Loss of consumer surplus = Rs 2,000 - Rs 1,200 = Rs 800. DWL = Rs 500 + Rs 800 = Rs 1300