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$38 $36 $34 $32 $30 $28 S = MC $26 $24 $22 $20 $18 $16 $14 $12 D = MB $10 $6 $4 SO 0 3 5 6 7 8 9 10 11 12 13 14 15 16 Quantity (Q) The graph above shows the supply and demand functions for a product produced in a small country in a perfectly competitive industry. The demand function is the sum of the demand functions of all the consumers in this country, the same as their marginal benefit functions. The supply function is the sum of the marginal-cost functions of all the firms in the industry. Forget about the tax and the subsidy. Start from the beginning. The government imposes a price floor of $26 per unit on this product. The deadweight loss of this policy will be: DWL = $32 CDWL = $36 DWL = $38 DWL = $40 ONone of the above.$38 $36 $34 $32 $30 $28 $26 S = MC $24 $22 $20 $18 $16 $14 $12 $10 D = MB $6 6 7 8 9 10 11 12 13 14 15 16 Quantity (Q) The graph above shows the supply and demand functions for a product produced in a small country in a perfectly competitive industry. The demand function is the sum of the Jemand functions of all the consumers in this country, the same as their marginal benefit functions. The supply function is the sum of the marginal-cost functions of all the firms in the industry. Forget about the tax and the subsidy. Start from the beginning. The government the government imposes a price floor of $24 per unit on this product. As a result, consumer surplus equals X dollars and producer surplus equals Y dollars, where: X = 36 & Y = $108 O X = 38 & Y = $110 O X = 38 & Y = $120 X = 40 & Y = $120 None of the above