Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss

question 37

Multiple Choice

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the market price falls from P₂ to P₃, then:

• A)total surplus increases.
• B)deadweight loss decreases.
• C)overproduction increases.
• D)underproduction decreases.

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Definitions:

Accredited Investors

Investors who earn an annual income of more than $200,000 or have a net worth of more than $1 million.

Financial Performance

A measure of how well a company can use assets from its primary mode of business and generate revenues.

Market Rates

The prevailing price or cost of goods, services, or commodities as determined by the marketplace.

Reliable Formula

A proven and dependable method or equation that consistently yields accurate results or outcomes.