Canada relies on a supply-management system for the production of food such as chicken, eggs, and milk. Accordingly, the government sets production quotas and distribute permits to farmers. The objective is to help sustain food prices by restricting production and limiting foreign competition. You are put in charge of this process for chicken. You know the inverse demand for chicken. According to your estimates the marginal cost of chicken producers is estimate real . However, the real marginal cost incurred by chicken producers is real up to the chicken farms' capacity max

You set a quota equal to the quantity corresponding to the intersection between the inverse demand and C estimate . Illustrate on Figure the loss that society incurs, if any, when compared to the optimal solution.