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Course: AP??/College Microeconomics?>?Unit 2
Lesson 8: The effects of government interventions in markets- Rent control and deadweight loss
- Minimum wage and price floors
- Price and quantity controls
- How price controls reallocate surplus
- The effect of government interventions on surplus
- Taxation and dead weight loss
- Example breaking down tax incidence
- Taxes and perfectly inelastic demand
- Taxes and perfectly elastic demand
- Tax Incidence and Deadweight Loss
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The effect of government interventions on surplus
Problem
This graph shows the market for fried bologna sandwiches. A binding price floor has been imposed on this market.
What area(s) depict the deadweight loss that results from producers who are no longer able to participate in this market?