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Without restrictions, the market supply curve is horizontal at P = 5, and the inverse demand for taxi cab rides is P = 20 -Q
Without restrictions, the market supply curve is horizontal at P = 5, and the inverse demand for taxi cab rides is P = 20 -Q in a competitive market. Subsequently, only 10 taxi cabs are allowed in the market. This results in a deadweight loss of:
A = 12.5
B = 0
C = 25
D = 5.5
I have been given the answer of 12.5 can you do the workings for this to explain it to me please
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