Total surplus equals:
A) consumer surplus + producer surplus − deadweight loss.
B) consumer surplus − producer surplus − deadweight loss.
C) consumer surplus − producer surplus + deadweight loss.
D) consumer surplus + producer surplus.

Question

Quizplus · Accepted Answer

Total surplus is the sum of consumer surplus and producer surplus, which represents the total value that buyers and sellers receive in a market. Deadweight loss is a loss of economic efficiency that occurs when the equilibrium quantity is below or above the efficient quantity. Since total surplus does not include deadweight loss, option A, B, and C are incorrect. Option D is the correct choice, as it accurately captures the total surplus in a market.

Total Surplus Equals