The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes $350 per month as the legal maximum rent, deadweight loss occurs because
A) consumers place a greater value on the last apartment unit than the cost to supply it.
B) the supplier of the last apartment unit receives a rental price that is less than the marginal cost of supplying it.
C) the quantity of apartments supplied has decreased.
D) All of the above.
A
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Allocative efficiency occurs when
a. output is produced at minimum average cost b. the marginal benefit, that consumers attach to the final unit purchased, just equals the opportunity cost of the resources employed to produce that unit. c. new firms enter a perfectly competitive market d. the marginal benefit consumers attach to products purchased is maximized e. goods and services are sold in an English style auction market
Aggregate demand refers to the
A) quantity demanded of all goods and services at various price levels, ceteris paribus. B) quantity demanded of all goods and services at a particular price level, ceteris paribus. C) quantity demanded of Real GDP at various price levels, ceteris paribus. D) various amounts of GDP that are demanded at various price levels, ceteris paribus. E) a and c