Deadweight loss is
A) the amount of taxes that consumers and monopolists pay.
B) the loss of output when a perfectly competitive firm becomes a monopolist.
C) a loss of benefit to consumers in a monopoly that no one else in society can obtain.
D) the price that consumers pay for a product in excess of the average cost of producing it.
Answer: C
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When economists say that market equilibrium is consistent with economic efficiency, they mean
a. the total gains from trade (the combined area of producer and consumer surplus) are smaller than potentially could be the case at a different price and quantity. b. all units creating more benefit than cost have been produced. c. some units have been produced that cost more than the benefits they create. d. consumers and producers have made decisions without properly taking into account the market price.
Which of the following basic economic concepts most clearly provides the foundation for the long-run aggregate supply curve?
a. the law of demand b. the production possibilities curve c. the law of comparative advantage d. the law of diminishing marginal utility