When the quantity of a good bought and sold is below the equilibrium quantity, the loss of total surplus that results is called:
A) deadweight loss.
B) producer surplus.
C) consumer surplus.
D) total surplus.

Question

Quizplus · Accepted Answer

When the quantity of a good bought and sold is below the equilibrium quantity, it means that some mutually beneficial transactions are not taking place. This leads to a reduction in total surplus and creates a deadweight loss, also known as efficiency loss. This loss is a measure of the inefficiency in the market caused by the quantity traded being less than the equilibrium quantity. Therefore, the best choice is A, deadweight loss.

When the Quantity of a Good Bought and Sold Is