When a deadweight loss occurs in a market, we can be certain that
A) taxes have been imposed in a market.
B) the market is a monopoly.
C) there underproduction in the market.
D) the entire society experiences a loss.

Question

Quizplus · Accepted Answer

When a deadweight loss occurs in a market, it means that the market is not operating efficiently and there is a loss to society as a whole. This can happen when there is underproduction or overproduction in the market, or when there are taxes or other barriers to entry that prevent the market from reaching its full potential.

When a Deadweight Loss Occurs in a Market, We Can