If there is underproduction in a competitive market, ________will increase if the quantity produced _________ to the equilibrium quantity.

Question

Quizplus · Accepted Answer

When there is underproduction in a competitive market, the quantity produced is less than the equilibrium quantity, which results in an inefficiency, known as deadweight loss. By increasing the quantity produced towards the equilibrium quantity, the deadweight loss decreases, and the market becomes more efficient. This increase in efficiency leads to an increase in total surplus, making choice D the correct answer.

If There Is Underproduction in a Competitive Market, ________Will Increase