- What is the deadweight loss caused by a price ceiling?

• A. The loss in producer surplus only, equal to the difference between equilibrium price and ceiling price times the quantity sold under the ceiling.
• B. The increase in consumer surplus equal to the rectangle between the ceiling price and equilibrium price multiplied by the equilibrium quantity.
• C. The revenue collected by the government equal to the price difference times the quantity sold under the ceiling.
• D. The reduction in total surplus equal to the area of the triangle between the supply and demand curves from the market equilibrium quantity to the lower quantity transacted under the ceiling.

Answer: (D)