In an attempt to address concerns about the increasing cost of education, the government is proposing to introduce caps on private school fees, which would enforce a price ceiling on the amount that private schools can charge parents to educate their children. The proposed price ceiling is $2,000 per year. The market equilibrium price is $4220 per year and the equilbrium quantity of private high school places available is 100,000 enrolments. The supply of private high school places at the price ceiling is 80,000 enrolments whilst the willingness of parents to pay for school fees is $6359 per year at the quantity of 80,000 enrolments. What is the dead weight loss as a result of the price ceiling in dollars? Answer to the nearest whole dollar.

Q&A Education