Suppose the equilibrium price of haircuts is $2 per haircut. A new law sets the price at
Question:
a. Illustrate the smallest possible deadweight loss from this program, and justify your answer.
b. Explain why the actual deadweight loss is almost surely greater than what you calculated in part (a).
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a b In the best case scenario the shaded area is the deadweight loss This area b...View the full answer
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