Refer to the above diagram.If actual production and consumption occur at Q₂: A) efficiency is achieved. B) an efficiency loss (or deadweight loss)of a + b + c + d occurs. C) an efficiency loss (or deadweight loss)of a + c occurs. D) an efficiency loss (or deadweight loss)of e + f occurs.

Question

Quizplus · Accepted Answer

Actual production and consumption occur at the intersection of the supply and demand curves, which is also where marginal benefit equals marginal cost. This is the point of allocative efficiency, where resources are being used to produce the goods and services that society values the most. Therefore, efficiency is achieved at Q₂.

Refer to the Above Diagram