Which of the following policies could lead to a deadweight loss?
A) price ceilings.
B) price floors.
C) policies prohibiting human cloning.
D) all of the above
E) A and B only

Question

Quizplus · Accepted Answer

Price ceilings and price floors can both lead to deadweight loss. Deadweight loss is a loss of economic efficiency that occurs when the quantity of a good or service produced is not equal to the quantity that would be produced in a perfectly competitive market. Price ceilings and price floors can both create distortions in the market that lead to deadweight loss.

Which of the Following Policies Could Lead to a Deadweight