Which of the Following Can Create Inefficiency and Deadweight Loss

Multiple Choice

Which of the following can create inefficiency and deadweight loss?

A) Moral hazard can create inefficiency and deadweight loss but adverse selection cannot.
B) Adverse selection can create inefficiency and deadweight loss but moral hazard cannot.
C) Both moral hazard and adverse selection can create inefficiency and deadweight loss.
D) Neither moral hazard nor adverse selection can create inefficiency and deadweight loss.
E) None of the above answers is correct because whether inefficiency and deadweight loss are created depends on whether the moral hazard and adverse selection affect demanders or suppliers.