Entry in a perfectly competitive market

A deadweight loss

A) is possible only if the good is underproduced but is not possible if the good is overproduced. B) subtracts only from producer surplus. C) is a loss to consumers and a gain to producers. D) is a loss inflicted on the entire society.

Generalizing using statistical discrimination is:

A. a rational response to being on the wrong end of an information asymmetry. B. a rational response, although government always steps in to prevent it. C. an irrational response and always leads to loss of surplus. D. All of these statements are true.