An efficiency loss (or deadweight loss) declines in size when a unit of output is produced for which:

A) marginal cost exceeds marginal benefit.
B) maximum willingness to pay exceeds minimum acceptable price.
C) consumer surplus exceeds producer surplus.
D) producer surplus exceeds consumer surplus.

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Alora Raulerson · Accepted Answer

Final Answer : B, Explanation :  Deadweight loss arises when the marginal cost exceeds the marginal benefit, creating an inefficiency in the market. However, producing a unit for which the maximum willingness to pay exceeds the minimum acceptable price creates a surplus that reduces the inefficiency, resulting in a smaller deadweight loss. Thus, choice B is the best answer. Choices A, C, and D do not necessarily correlate with a reduction in deadweight loss.

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An efficiency loss (or deadweight loss) declines in size when a unit of output is produced for which:A) marginal cost exceeds marginal benefit.B) maximum willingness to pay exceeds minimum acceptable price.C) consumer surplus exceeds producer surplus.D) producer surplus exceeds consumer surplus.

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