Deadweight Loss Is

question 245

Multiple Choice

Deadweight loss is:

• A) necessary to ensure that resources are channeled to their highest-valued use.
• B) the loss to the economy from firms going out of business due to competition.
• C) usually offset by deadweight gains.
• D) the total of lost consumer and producer surplus when not all mutually profitable gains from trade are exploited.

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Definitions:

Monopolistic Distributor

A single seller or distributor in a market that controls a large portion of the market share, limiting competition.

Monopolistic Producer

A market situation where a single producer controls the majority of the market for a particular good or service, restricting competition.

Marginal Cost

The financial implication of manufacturing an additional unit of a product or service.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded by consumers in a given time period.