-The figure above shows the market for brooms.If 800 brooms are produced,
A) consumer surplus is maximized.
B) producer surplus is maximized.
C) market failure and a deadweight loss occur.
D) marginal cost is less than marginal benefit.
E) there is no deadweight loss.

Question

-The figure above shows the market for brooms.If 800 brooms are produced,
A) consumer surplus is maximized. 
B) producer surplus is maximized. 
C) market failure and a deadweight loss occur. 
D) marginal cost is less than marginal benefit. 
E) there is no deadweight loss.

Quizplus · Accepted Answer

When 800 brooms are produced, it indicates that the quantity produced is not at the market equilibrium, leading to a situation where marginal cost is not equal to marginal benefit. This discrepancy results in market failure and a deadweight loss because the allocation of resources is not efficient, meaning not all potential gains from trade are being realized.

-The Figure Above Shows the Market for Brooms