The size of a deadweight loss in a market is reduced by
A)government legislating a price ceiling.
B)government legislating a price floor.
C)market price being close to marginal cost.
D)creative destruction.

Question

Quizplus · Accepted Answer

When the market price is close to marginal cost, it signifies that the market is efficient and allocates resources effectively, minimizing the deadweight loss. Therefore, C is the best choice. A and B can create deadweight losses themselves, while D is not related to the reduction of a deadweight loss in a market.

The Size of a Deadweight Loss in a Market Is