A deadweight loss is created
A) only if the last unit produced has a marginal social benefit greater than its marginal social cost.
B) only if the last unit produced has a marginal social cost greater than its marginal social benefit.
C) only if the last unit produced has a marginal social benefit equal to its marginal social cost.
D) if for the last unit produced, marginal social cost is greater than its marginal social benefit or if its marginal social benefit is greater than its marginal social cost.

Question

Quizplus · Accepted Answer

Deadweight loss occurs when the allocation of resources is not optimal, meaning that the marginal social cost does not equal the marginal social benefit. This can happen if either the marginal social cost is greater than the marginal social benefit or vice versa.

A Deadweight Loss Is Created