The loss in economic surplus that results from disequilibrium market outcomes is
A)A deadweight loss
B)A market failure
C)A consumer surplus
D)A producer surplus

Question

Quizplus · Accepted Answer

A deadweight loss is the loss in economic surplus that results from market outcomes that are not at equilibrium. This occurs when there is either an underproduction or an overproduction of goods or services, leading to a loss of potential gains from trade. Deadweight loss is a type of market failure because the market is not achieving the efficient allocation of resources. Consumer surplus and producer surplus refer to the benefits received by consumers and producers, respectively, in a market transaction.

The Loss in Economic Surplus That Results from Disequilibrium Market