Assume a market is producing efficiently.Which type of government intervention in this market might create a deadweight loss?
i.a price ceiling
ii.a price floor
iii.a price support
A) i only
B) i and ii
C) iii only
D) ii and iii
E) i, ii, and iii

Question

Quizplus · Accepted Answer

All three types of government intervention—price ceilings, price floors, and price supports—can create deadweight losses by distorting market equilibrium, leading to either excess supply or demand and reducing overall economic efficiency.

Assume a Market Is Producing Efficiently