Why Are Prices Above Equilibrium Considered to Be Inefficient

question 37

Multiple Choice

Why are prices above equilibrium considered to be inefficient?

• A) They cause a deadweight loss in total surplus.
• B) They cause producers to lose even though the losses are offset by consumer gains.
• C) They cause consumers to lose even though their losses are exactly offset by producer gains.
• D) Anything that raises prices for consumers means that the market has lost efficiency.

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