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The government adopts a price support program for wheat, and supports the wheat price at P2. The triangular area defined by points B and C and the intersection of the supply and demand curve represents the:

User Oneezy
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Final answer:

The triangular area defined by points B and C and the intersection of the supply and demand curve when a price support is set above equilibrium price represents the deadweight loss or welfare loss, indicating the economic inefficiency created by the surplus in the market.

Step-by-step explanation:

The student is asking about the implications of a government price support program on the market for wheat. In this scenario, the government sets a price support at a level P2, which is above the market equilibrium price. This action results in a quantity supplied that exceeds the quantity demanded, creating a surplus in the market. This surplus is represented by the triangular area defined by points B and C and the intersection of the supply and demand curves. This area is commonly referred to as deadweight loss or welfare loss, indicating the loss of economic efficiency in the market when the price is kept artificially high.

User Damageboy
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