Deadweight loss
A)results when marginal benefits and marginal costs are not equal.
B)is measured by calculating the costs of government.
C)results when competitive markets are in equilibrium.
D)is a by-product of Pareto efficiency.
E)is the cost of protecting private property rights.

Question

Quizplus · Accepted Answer

Deadweight loss results when marginal benefits and marginal costs are not equal, which means that there is a loss of overall efficiency in a market or economy. This can occur due to market failures such as externalities or monopolies, where the price or quantity of a good or service is distorted from its socially optimal level. In contrast, options B, C, D, and E do not accurately describe deadweight loss.

Deadweight Loss