Which of the following statements is not correct?
A) Total surplus is the sum of consumer and producer surplus.
B) Deadweight loss is the net loss of both consumer and producer surplus resulting from underproduction or overproduction of a product.
C) Deadweight loss is a measure of market inefficiency.
D) Total surplus is maximized when the actual quantity supplied exceeds the equilibrium quantity.

Question

Which of the following statements is not  correct?
A) Total surplus is the sum of consumer and producer surplus.
B) Deadweight loss is the net loss of both consumer and producer surplus resulting from underproduction or overproduction of a product.
C) Deadweight loss is a measure of market inefficiency.
D) Total surplus is maximized when the actual quantity supplied exceeds the equilibrium quantity.

Quizplus · Accepted Answer

Total surplus is maximized at the equilibrium quantity where the quantity supplied is equal to the quantity demanded. At any other quantity, there will be a decrease in either consumer or producer surplus, resulting in a lower total surplus.

Which of the Following Statements Is Not Correct