13. We defined deadweight loss as the decrease in economic activity caused by market distortions. One place
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13. We defined deadweight loss as the decrease in economic activity caused by market distortions.
One place where we see deadweight loss is during Halloween’s trick-or-treat. Children of all ages return home with bags of candy, some of which they love and some of which they don’t care for. A lot of candy ends up uneaten. In this context, we can think of uneaten candy as not being distributed effectively by the market; therefore, deadweight loss occurs. What ways can you think of to improve how candy is given away during trick-ortreat so that children would receive more candies they enjoy? Provide three possible solutions.
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