-Refer to Figure 15-4. Why is there a deadweight loss? A) because the marginal social cost of producing each additional unit in excess of Q₂exceeds the marginal benefit B) because the marginal private cost of producing each additional unit in excess of Q₂exceeds the marginal benefit C) because the marginal social benefit of producing each additional unit in excess of Q₂ exceeds the private cost D) because the marginal private benefit of producing each additional unit in excess of Q₂ exceeds the social cost

Question

Quizplus · Accepted Answer

Deadweight loss occurs when the marginal social cost exceeds the marginal benefit, leading to overproduction beyond the socially optimal quantity Q2.