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17 October, 12:58

Deadweight loss occurs when

a) producer surplus is greater than consumer surplus.

b) consumer surplus is reduced.

c) an inferior good is consumed.

d) the maximum level of total welfare is not achieved.

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Answers (1)
  1. 17 October, 13:06
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    d) the maximum level of total welfare is not achieved.

    Explanation:

    When the economic efficiency bears a loss, it is termed to be a deadweight loss. This condition occurs in the situation when the free market equilibrium is not able to be achieved. It occurs in the economy when the supply and the demand for the goods and services start to fall from being in the state of equilibrium. The resources allocated experiences a deficiency, thereby causing a deadweight loss.
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