Which of the following leads to a deadweight loss? i. Overproduction
Ii) Underproduction
Iii) Taxes
Iv) Monopoly
A) i, ii, iii and iv
B) i and ii
C) ii only
D) iii and iv
E) i, ii, and iii

Question

Quizplus · Accepted Answer

All options (overproduction, underproduction, taxes, and monopoly) lead to a deadweight loss because they cause the market to deviate from its efficient equilibrium, where supply equals demand. This results in a loss of total welfare or economic efficiency.

Which of the Following Leads to a Deadweight Loss? I