The loss of total surplus that results when the quantity of a good that is bought and sold is below the market equilibrium quantity is called:
A)deadweight loss.
B)producer surplus.
C)consumer surplus.
D)total surplus.

Question

Quizplus · Accepted Answer

The loss of total surplus due to the reduction in quantity demanded and supplied below the market equilibrium is known as deadweight loss. It occurs because there are mutually beneficial transactions that no longer take place, resulting in a loss of economic efficiency in the market. Producer and consumer surplus refer to the benefits gained by producers and consumers, respectively, from participating in a market transaction. Total surplus is the sum of producer and consumer surplus, and deadweight loss reduces this overall benefit.

The Loss of Total Surplus That Results When the Quantity