How Does the Inefficiency of a Deadweight Loss Come About

question 40

Multiple Choice

How does the inefficiency of a deadweight loss come about

• A)Consumers who still buy the product at the higher price will be worse off due to the loss of its consumer surplus.
• B)Consumers who still buy the product at the high price are worse off than they would be if they paid a lower price.
• C)Consumers buy fewer units due to the monopoly price, which exceeds the socially optimal price.
• D)Consumers buy more units due to the monopoly price, which is less than the socially optimal price.

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Definitions:

Economic Actors

Individuals, households, businesses, and governments that make decisions about the allocation of resources and consumption of goods and services in an economy.

Systematic Mistakes

Errors that occur consistently as a result of a flawed system, process, or mechanism.

Statistical Probability

The likelihood of an event occurring, based on the analysis of numerical data.

Overconfident

A psychological condition where an individual's belief in their own abilities, decisions, or forecasts exceeds the objective accuracy of those beliefs, often leading to risk-taking behaviors.