The Ministry of Misallocation has decreed that the production of widgets must be 4000 each month and the production of gizmos must be 10000 each month. Calculate the deadweight loss in each market caused by these restrictions. Please note the scale of the quantity axis is in thousands.

The deadweight loss in the context of economics is the excess burden on the economic efficiency that creates the market inefficiency for the equilibrium in the supply and demand of products.

There will be NO deadweight loss in the market that is caused due to the restrictions.

As per the question, the ministry of misallocation has decreed the production widgets to 4000 each month.

In the given case the equilibrium quantity is 4000 and the production of gizmos should be 10,000.

Thus, this means that equilibrium quantity is exactly equal to the output as set by the ministry of misallocation. Therefore, there will be no deadweight loss in the widgets market.

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Solution and Explanation:

The Equilibrium quantity of the widgets = 4000  and production of gizoms must be 10000

According to the ministry of misallocation production of the widgets must be 4000 each month.  It means that equilibrium quantity is exactly equal to the output as set by the ministry of misallocation.

So, therefore there will be no deadweight loss in the widgets market.

Note: the scale of quantity axis has been taken in thousands as provided and mentioned in the question.

answer; 33,000;