Assume that the market for good x is defined as follows: qd = 64 - 16p and qs = 16p - 8. if the government restricts output in this market to 16 units, what is the loss associated with this policy?

I guess the answer is $9.

At equilibrium, Qd=Qs

Therefore, 64-16P=16P-8

Or, 32P=72 or, P=72/32=$2.25

At equilibrium, Qd=Qs=28.

If government restricts quantity to 16 units then it will create deadweight loss to the market.

If quantity=16,

Qd=16=64-16P or, Pdemand = 3

Demand price is $3 at this fixed quantity=16 Similarly, Qs=16=16P-8 or, Psupply = $1.5

At this quantity, supply price is $1.5

So, deadweight loss = loss in consumer surplus + loss in producers surplus

={ (1/2) * (28-16) * (3-2.25) } + { (1/2) * (28-16) * (2.25-1.5) }

= (4.5+4.5) = 9

Therefore, loss equals $9.