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 measure of the reduction in net economic benefits resulting from an inefficient allocation of resources. It represents the area of consumer and producer surplus that is lost due to a distortion in the market that prevents the efficient equilibrium quantity from being reached.

Deadweight Loss Can Be Explained as