The reduction in consumer and producer surplus that results from underproduction is called
A) a quantity loss.
B) a deadweight loss.
C) an internal cost.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

A deadweight loss occurs when there is a reduction in consumer and producer surplus due to inefficiencies in the market, such as underproduction or overproduction, leading to a loss of economic efficiency.

The Reduction in Consumer and Producer Surplus That Results from Underproduction