When marginal benefit exceeds marginal cost in a market,
A) only consumer surplus is reduced.
B) only producer surplus is reduced.
C) consumer surplus and producer surplus are not affected compared to when production is such that marginal cost equals marginal benefit.
D) the deadweight loss is negative.
E) None of the above answers is correct.
E
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If the government were to increase income taxes, we would predict:
A. a downward movement along the aggregate demand curve. B. a shift in aggregate demand to the right. C. a shift in aggregate demand to the left. D. an upward movement along the aggregate demand.
A firm operating in a purely competitive labor market has the following marginal revenue product schedule.WorkersMRP1$24222320418516614712If the wage rate decreases from $17 to $13, by how much will the firm expand employment?
A. 5 workers B. 4 workers C. 3 workers D. 2 workers