Answered: When there is a deadweight loss in the…

When there is a deadweight loss in the market, the marginal benefit must be larger than the marginal cost at the quantity transacted. Do you agree? Explain with a diagram

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.5P

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When there is a deadweight loss in the market, the marginal benefit must be larger than the marginal cost at the quantity transacted. Do you agree? Explain with a diagram.

Definition Definition Cost to society created by market inefficiency when supply and demand are not in market equilibrium.

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