Refer to the figure below which demonstrates a $300 maximum price allowed. The triangle des is called:

Question

BlackTom AI · Accepted Answer

Deadweight loss arises when a policy (here a price ceiling of $300) prevents mutually beneficial trades that would occur at the market equilibrium.

1. Relevant knowledge points and concepts
- Equilibrium maximizes total surplus where supply and demand intersect (point e). 
- A binding price ceiling (maximum price) set below the equilibrium price reduces quantity supplied and creates lost gains from trade. 
- Deadweight loss (DWL) is the triangular area measuring the total surplus lost from transactions that no longer occur. Its area = 1/2 × (reduction in quantity) × (difference in willingness to pay and cost for the marginal units).

2. Step-by-step reasoning
- From the figure, equilibrium is at price $400 and quantity 1,000 (point e). 
- The maximum allowed price is $300, which is below equilibrium and thus binding. At $300 suppliers supply only 700 units (point s). 
- The reduction in traded quantity is 1,000 − 700 = 300 units. The lost surplus per marginal unit (vertical distance between the willingness to pay at the equilibrium margin and the new price) is $400 − $300 = $100.

3. Calculations (intermediate steps)
- Base = quantity reduction = 300 units.
- Height = price difference relevant to the marginal units = $100.
- DWL area = 1/2 × base × height = 1/2 × 300 × 100 = $15,000.

4. Why the correct answer is correct
- The triangle labeled des exactly measures the triangular area of lost total surplus (deadweight loss) from the prevented trades between 700 and 1,000 units after imposing the $300 ceiling. It is not a transfer to buyers or sellers but pure loss to society.

5. Why the other options are incorrect
- "A rent control" describes the policy (price ceiling) itself, not the triangular area. 
- "A maximum price area" is vague and does not identify the lost-surplus triangle. 
- "A shortage" refers to the quantity gap (demand − supply = 300 units) but is not the triangular area of lost surplus.

6. Conclusion
- The triangle des is a deadweight loss. This confirms the provided answer: A deadweight loss.

Refer to the figure below which demonstrates a $300 maximum price allowed. The triangle des is called: 单项选择题

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