Deadweight loss can be explained as:
A)an increase in economic benefits due to efficient allocation of resources
B)a reduction in net economic benefits resulting from an inefficient allocation of resources
C)an increase in economic benefits due to inefficient allocation of resources
D)a decline in the quantity of output produced due to the inefficient allocation of resources

Question

Quizplus · Accepted Answer

Deadweight loss is a reduction in net economic benefits resulting from an inefficient allocation of resources. It occurs when the marginal cost of producing a good or service is not equal to its marginal benefit, leading to a loss of potential economic surplus. Deadweight loss refers to the reduction in net economic benefits resulting from an inefficient allocation of resources. It occurs when the marginal benefit of a good or service to consumers is not equal to the marginal cost of production, leading to a loss in overall welfare. This inefficiency results in a reduction in consumer and producer surplus, and ultimately leads to a net loss of economic welfare.

Deadweight Loss Can Be Explained As