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A-Level Economics · Maximum price diagram question

Which area is the DEADWEIGHT WELFARE LOSS from the cap?

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The diagram

The answer

The triangle B E F. Trades 3→5 no longer happen: buyers valued them above cost (D above S there) — surplus destroyed, pointing at E. Between Q=3 and Q=5, willingness to pay (D, from B) exceeds cost (S, from F) — those trades are banned by the cap. Triangle BEF, pointing at equilibrium E, is the loss.

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This is one of 6 questions on the maximum price diagram — every corner lettered, every wrong answer diagnosed.

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