If total welfare is equal to the entire area under the demand curve,what other information do we know with certainty?
A) Consumer surplus is maximized.
B) Producer surplus is maximized.
C) Deadweight loss is zero.
D) Consumer surplus is equal to producer surplus.
E) A firm has achieved perfect price discrimination.

Question

Quizplus · Accepted Answer

Deadweight loss being zero indicates that the market is operating at maximum efficiency, where total welfare (the sum of consumer and producer surplus) is maximized. This occurs when there are no inefficiencies in the market, such as taxes, subsidies, or monopolies, that would cause a deviation from the equilibrium where supply equals demand.

If Total Welfare Is Equal to the Entire Area Under