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When Marginal Benefit Exceeds Marginal Cost in a Market

Question 118

Multiple Choice

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.

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