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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Definitions:

Transverse Foramina

Small openings in the transverse processes of the cervical vertebrae allowing passage of the vertebral artery.

Transverse Processes

Lateral projections from the vertebrae to which muscles and ligaments attach, and serve as points of articulation for ribs in thoracic vertebrae.

Vertebral Arch

The structure in a vertebra that encloses the spinal cord, formed by pedicles and laminae.

Lamina

Part of the vertebral arch in the spine that forms the back part of the spinal canal which encloses and protects the spinal cord.