The loss associated with the fact that at the profit-maximizing quantity consumers value the goods more than it cost to produce them is called
A) deadweight loss.
B) comparative loss.
C) Lerner Loss.
D) Consumer Value Loss.

Question

Quizplus · Accepted Answer

Deadweight loss, also known as excess burden, represents the loss of economic efficiency that occurs when the equilibrium quantity of a good or service is not being produced. In this case, the profit-maximizing quantity is lower than the quantity that consumers value more than the cost of production, which means that there is a potential exchange that is not made. This results in a net welfare loss for society.

The Loss Associated with the Fact That at the Profit-Maximizing