In an efficient market, deadweight loss is ____.
A) maximum.
B) minimum.
C) constant.
D) zero.

Question

Quizplus · Accepted Answer

In an efficient market, deadweight loss is zero. This is because an efficient market ensures that the quantity of goods and services that consumers are demanding is equal to the quantity that producers are supplying, and the price at which the two sides transact reflects the true value of the goods or services. Therefore, there is no need for any government intervention or regulation to achieve an optimal allocation of resources, and no inefficiencies or losses occur.

In an Efficient Market, Deadweight Loss Is ____