Suppose that, recognizing that an efficient market outcome may not me equitable, a central planner announces that each agent's net benefit (the difference between the reservation value and the price paid) beyond a certain amount will be taken away and redistributed to other agents whose new benefit is below the specified level. This policy is expected to produce ___________

A) an efficient outcome where every agent has the same net benefit
B) an efficient outcome where every agent has 0 net benefit
C) an inefficient outcome where no trade will occur
D) an inefficient outcome where trades will occur at the higher price than at the equilibrium


Ans: C) an inefficient outcome where no trade will occur

Economics

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A. $100; 5000 B. $125; 4000 C. $50; 8000 D. $75; 6000

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Answer the following statement true (T) or false (F)

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A high degree of concentration in a market suggests that firms in that market:

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Economics