The resulting reduction in total economic surplus due to the introduction of a price-regulating policy is
A) producer surplus.
B) deadweight loss.
C) total economic surplus.
D) conspicuous consumption.
E) consumer surplus.

Question

Quizplus · Accepted Answer

A price-regulating policy that results in a decrease in total economic surplus above the initial equilibrium level creates a loss of surplus that is termed as deadweight loss. Deadweight loss refers to the lost economic surplus due to market inefficiencies caused by the price-regulating policy.

The Resulting Reduction in Total Economic Surplus Due to the Introduction