An eﬃciency loss (or deadweight loss) declines in size when a unit of output is produced for which
A) marginal cost exceeds marginal beneﬁt.
B) maximum willingness to pay exceeds minimum acceptable price.
C) consumer surplus exceeds producer surplus.
D) producer surplus exceeds consumer surplus.

Question

Quizplus · Accepted Answer

An efficiency loss (or deadweight loss) declines when the value to buyers (maximum willingness to pay) exceeds the cost to sellers (minimum acceptable price), as this indicates that the production and consumption of an additional unit of output would be efficient and beneficial to the economy, reducing the deadweight loss.

An Eﬃciency Loss (Or Deadweight Loss) Declines in Size When