When the Market Price Is Held Above the Competitive Level

question 43

Multiple Choice

When the market price is held above the competitive level, the deadweight loss is composed of:

• A) producer surplus losses associated with units that used to be traded on the market but are no longer exchanged.
• B) consumer surplus losses associated with units that used to be traded on the market but are no longer exchanged.
• C) producer and consumer surplus losses associated with units that used to be traded on the market but are no longer exchanged.
• D) There is no deadweight loss if the government uses a price floor policy to increase the price.

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Definitions:

Somatic

Relating to the body, especially as distinct from the mind or emotions, often used in the context of bodily symptoms caused by psychological factors.

Central

Pertaining to the primary or most important part, or located in the center.

Sympathetic

Showing compassion, understanding, or concern towards others, often in situations where they are in distress.

Somatic

Somatic relates to the physical body as opposed to the mind, often used in contexts discussing bodily disorders without organic or physiological causes.