Question

question 16 of 19 > click on the graph below to make it interactive and answer the following questions. a. which of the following types of market failure can lead to the type of deadweight loss depicted in the interactive graph? (select all that apply.) negative (bad) externalities taxes and quotas market power positive (good) externalities b. what does this type of deadweight loss triangle reflect? excess marginal costs and too many transactions a lack of advantageous transactions implemented and marginal benefits acquired too many transactions executed and marginal benefits acquired excess marginal costs and a lack of advantageous transactions

Explanation:

a. Negative externalities occur when the production or consumption of a good or service imposes costs on a third - party not involved in the transaction. Taxes and quotas can create market inefficiencies and deadweight loss. Market power allows firms to restrict output and raise prices, leading to deadweight loss. Positive externalities, on the other hand, lead to under - production rather than the type of deadweight loss shown here.
b. Deadweight loss represents the loss of economic efficiency that occurs when the equilibrium for a good or service is not Pareto optimal. In this case, it reflects a situation where there are excess marginal costs and a lack of advantageous transactions due to the market not operating at the efficient quantity.

Answer:

a. negative (bad) externalities, taxes and quotas, market power
b. excess marginal costs and a lack of advantageous transactions