When There Is Market Failure So That a Market Produces

question 166

Multiple Choice

When there is market failure so that a market produces less than the efficient amount,

• A) consumer surplus definitely is larger than when the efficient quantity is produced.
• B) the sum of producer surplus and consumer surplus is larger than when the efficient quantity is produced.
• C) there is a deadweight loss.
• D) consumers definitely lose and producers definitely gain.
• E) consumers definitely gain and producers definitely lose.

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Definitions:

Wood

A hard, fibrous material made of the stems and branches of trees or shrubs, often used for construction, furniture, and fuel.

Production Function

A mathematical relationship describing the maximum output possible from a given set of inputs in the production process.

Plastic

A synthetic material made from a wide range of organic polymers that can be molded into shape while soft, and then set into a rigid or slightly elastic form.

Wood

The hard, fibrous structural tissue found in the stems and roots of trees and other woody plants.