A market's deadweight loss is calculated as:
A)the economic loss that a firm has when it is not producing its profit-maximizing output.
B)the loss to consumers when a product malfunctions or fails to meet expectations.
C)the economic surplus at the efficient quantity minus the economic surplus at the actual quantity.
D)the price at equilibrium minus the price at actual quantity.

Question

Quizplus · Accepted Answer

Deadweight loss is the loss of economic efficiency that occurs when the equilibrium quantity of a good or service is not produced. This leads to a reduction in consumer and producer surplus. The market's deadweight loss is calculated as the difference between the economic surplus at the efficient quantity and the economic surplus at the actual quantity. Choice A refers to firm loss, Choice B refers to product quality issues, and Choice D relates to price difference, but none of these choices reflect the definition of deadweight loss.

A Market's Deadweight Loss Is Calculated As