Question

When the quantity of a good bought and sold is below the market equilibrium quantity, the loss of total surplus that results is called:

Answer 1

Deadweight loss is the loss of total surplus that occurs when the quantity of a good bought and sold is below the market equilibrium quantity.

Step-by-step explanation:

The loss of total surplus that occurs when the quantity of a good bought and sold is below the market equilibrium quantity is called deadweight loss. Deadweight loss represents the inefficiency in the market and refers to the loss of economic welfare that occurs when the quantity traded is less than the efficient level. It is like money thrown away that benefits no one, resulting in a reduction in the total surplus of society.