There will be no deadweight loss if the marginal benefit to consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized.

Question

Quizplus · Accepted Answer

Deadweight loss occurs when the marginal benefit to consumers differs from the marginal cost of production, resulting in either underproduction or overproduction. If the marginal benefit to consumers is equal to the marginal cost of production, the market is operating efficiently and there is no deadweight loss. Maximizing the sum of consumer surplus and producer surplus also ensures efficient market outcomes.

There Will Be No Deadweight Loss If the Marginal Benefit