# Inefficiency of Price Floors and Price Ceilings

## Try It

• The deadweight loss is $3,000 Incorrect. The deadweight loss is the loss of consumer and producer surplus ­– the area to the right of the quantity produced after the price ceiling (1000) below the demand curve and above the supply curve. Loss of consumer surplus = (($5-$3)*(2000 lbs-1000))/2) =$1000. Loss of producer surplus = (($3-$2)*(2000 lbs-1000))/2) = $500. Total deadweight loss =$1500.
• The deadweight loss is $1,500 Correct. The deadweight loss is the loss of consumer and producer surplus ­– the area to the right of the quantity produced after the price ceiling (1000) below the demand curve and above the supply curve. Loss of consumer surplus = (($5-$3)*(2000 lbs-1000))/2) =$1000. Loss of producer surplus = (($3-$2)*(2000 lbs-1000))/2) = $500. Total deadweight loss =$1500.
• The deadweight loss is $1,000 Incorrect. The deadweight loss is the loss of consumer and producer surplus ­– the area to the right of the quantity produced after the price ceiling (1000) below the demand curve and above the supply curve. Loss of consumer surplus = (($5-$3)*(2000 lbs-1000))/2) =$1000. Loss of producer surplus = (($3-$2)*(2000 lbs-1000))/2) = $500. Total deadweight loss =$1500.