Deadweight losses occur when the quantity of an output produced is
A) less than, but not when it is greater than, the competitive equilibrium quantity.
B) greater than, but not when it is less than, the competitive equilibrium quantity.
C) less than or greater than the competitive equilibrium quantity.
D) such that the marginal beneﬁt of the output is just equal to the marginal cost.

Question

Quizplus · Accepted Answer

Deadweight losses occur when the quantity of an output produced is either less than or greater than the competitive equilibrium quantity. This is because at any quantity other than the equilibrium, the marginal benefit does not equal the marginal cost, leading to inefficiency.

Deadweight Losses Occur When the Quantity of an Output Produced