Asked by Riley Bynum on Apr 27, 2024
Verified
A deadweight loss occurs ________ in a market.
A) only when there is overproduction
B) only when there is underproduction
C) when there is efficient production
D) when there is underproduction or overproduction
Deadweight Loss
A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved.
- Acquire knowledge on the idea of deadweight loss and the factors leading to it.
- Distinguish between instances of overproduction and underproduction, as well as their effects on surplus and deadweight loss.
Verified Answer
TH
Tanner HearneApr 30, 2024
Final Answer :
D
Explanation :
Deadweight loss occurs when there is either underproduction or overproduction in a market, leading to inefficiency where the market allocation of resources is not optimal, causing losses in economic welfare.
Learning Objectives
- Acquire knowledge on the idea of deadweight loss and the factors leading to it.
- Distinguish between instances of overproduction and underproduction, as well as their effects on surplus and deadweight loss.