The decrease in consumer surplus and producer surplus that results from an inefficient level of production is called the
A) external benefit.
B) big tradeoff.
C) external cost.
D) deadweight loss.

Question

Quizplus · Accepted Answer

Deadweight loss refers to the reduction in economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is not achievable. This can happen due to various reasons such as taxes, subsidies, price controls, or monopolies, leading to a decrease in both consumer and producer surplus.

The Decrease in Consumer Surplus and Producer Surplus That Results