If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss.
II) decreases total surplus.
A) Only I is correct.
B) Only II is correct.
C) Both I and II are correct.
D) Neither I nor II is correct.

Question

Quizplus · Accepted Answer

Restricting the quantity of corn below the equilibrium level leads to a deadweight loss because the market is not operating at its most efficient point, and total surplus decreases as the potential gains from trade are not fully realized.

If the Government Restricts the Selling of Corn So That