When a market is missing:
A) deadweight loss will increase, but only if more units are exchanged.
B) the government must create the market artificially.
C) total surplus could increase through the creation of a new market.
D) consumers' willingness to pay is too low to sustain the efficient quantity.

Question

Quizplus · Accepted Answer

When a market is missing, it means that there are no buyers and sellers engaging in exchanges for a particular good or service. This creates a potential for total surplus to increase if a new market is created. By bringing together buyers and sellers, trade can occur, benefiting both parties, and potentially increasing total surplus as a result. Therefore, choice C is the best answer.

When a Market Is Missing