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Why Are Prices Above Equilibrium Considered to Be Inefficient

Question 71

Multiple Choice

Why are prices above equilibrium considered to be inefficient?


A) They cause a deadweight loss in total surplus.
B) They cause producers to lose even though the losses are offset by consumer gains.
C) They cause consumers to lose even though their losses are exactly offset by producer gains.
D) Anything that raises prices for consumers means that the market has lost efficiency.

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