Exhibit 15-1

-Refer to Exhibit 15-1. Which quantity minimizes deadweight loss to society?

Question

Exhibit 15-1

-Refer to Exhibit 15-1. Which quantity minimizes deadweight loss to society?

Quizplus · Accepted Answer

q* minimizes deadweight loss to society as it is the quantity where marginal cost equals marginal benefit. At this quantity, resources are allocated efficiently and deadweight loss is minimized. Q1 and Q1' are suboptimal quantities where either the marginal cost is greater than the marginal benefit (Q1') or the marginal benefit is greater than the marginal cost (Q1), resulting in deadweight loss.

Exhibit 15-1 -Refer to Exhibit 15-1. Which Quantity Minimizes Deadweight Loss to Deadweight