If quantity supplied is either greater or less than the equilibrium quantity,then all of the following are true except:
A)total loss of surplus will depend on the shape of the demand and supply curves.
B)the resulting loss of consumer surplus will depend on the price of the good.
C)total loss of surplus will depend on the price of the good.
D)there will be an inefficient allocation of resources.

Question

Quizplus · Accepted Answer

DOption C is incorrect because the total loss of surplus depends on the distance between the equilibrium quantity and the actual quantity supplied, as well as the shapes of the demand and supply curves, rather than directly on the price of the good. Option D is correct because when quantity supplied is not at equilibrium, it leads to either excess supply or demand, causing an inefficient allocation of resources.

If Quantity Supplied Is Either Greater or Less Than the Equilibrium