Deadweight Loss Occurs When

question 52

Multiple Choice

Deadweight loss occurs when

• A) producer surplus is greater than consumer surplus.
• B) the maximum level of total welfare is not achieved.
• C) consumer surplus is reduced.
• D) an inferior good is consumed.

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Definitions:

Stock Split

A process by which a corporation reduces the par or stated value of its common stock by issuing a proportionate number of additional shares.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the market capitalization remains unchanged.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

Retained Earnings

The part of the net earnings kept by the company instead of being paid out to its shareholders in the form of dividends.