Use the figure below to answer the following questions. Figure 5.3.1
-Refer to Figure 5.3.1.If the quantity produced is 200,
A)a deadweight loss exists.
B)the sum of consumer surplus and producer surplus is maximized.
C)production is efficient.
D)the sum of consumer surplus and producer surplus is zero.
E)deadweight loss is minimized.

Question

Use the figure below to answer the following questions.  Figure 5.3.1
-Refer to Figure 5.3.1.If the quantity produced is 200,
A)a deadweight loss exists. 
B)the sum of consumer surplus and producer surplus is maximized. 
C)production is efficient. 
D)the sum of consumer surplus and producer surplus is zero. 
E)deadweight loss is minimized.

Quizplus · Accepted Answer

When the quantity produced is not at the equilibrium quantity, where supply equals demand, a deadweight loss exists because the market is not operating at maximum efficiency, leading to lost potential welfare or surplus.

Use the Figure Below to Answer the Following Questions