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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