Anyone good at Economics?

[Vanessa Brostovski]

Hey guys, anyone out there available to chat for a couple minutes about Economics? I have a problem I'm working on w/ a supply & demand graph. I'm trying to calculate a problem where Quantity demanded=9-P and Quantity Supplied=2 x P. The Price is $3 for equilibrium, but I'm trying to calculate if there is a price ceiling of $0, what will be the deadweight loss?

[Christian Malesic]

I am a geek, so I haven't been able to move on with my day, without getting this out of my head.

Let's review what you have:

D = 9 - p
S = 2 X p

Equil:
9 - p = 2 X p = 2p
9 = 2p + p = 3p
9/3 = p
So, yes, p = $3.00

I had to go to wikipedia to remember what a "deadweight loss" was.
Deadweight loss def

It is pretty intuitive, but I wanted to give you the right answer here.

So, your deadweight loss is $3.00.

This, is the difference between equilibrium and the price ceiling.

A few examples are on the web page listed above. Here is another from my head. You are a vendor at Sea World selling Cokes and subs. The equil for selling Cokes is $3.00 which represents where supply meets demand in a free market (as a vendor you would have caluclated this based on your cost of goods sold and a little experimentation over time). To make this problem work, let's say Sea World has a special today: all the Cokes you can drink are included with admission. They pass that cost along to you as a vendor within their park. Thus, they are creating a price ceiling of $0 for Cokes today. Your deadwight loss to provide Cokes is $3.00 for today only.

I hope that helps and I haven't given you misdirection. Again, it has been a long time. Can anybody confirm that I have done it all correctly?