Final answer:
Consumer surplus is truly greater when there is a larger gap between what consumers are willing to pay and the market price. Deadweight loss occurs when a market is producing at an inefficient quantity, leading to loss in total surplus.
Step-by-step explanation:
Consumer surplus is the extra benefit that consumers receive from buying a good or service, measured by what individuals would have been willing to pay minus the amount that they actually paid. The initial statement is true: if the difference between the value that consumers place on a good or service (what they're willing to pay) and the market price is large, consumer surplus will be larger, indeed providing more benefit to the consumer. This concept is fundamental to understanding the demand curve, which is a graphic representation of the relationship between price and quantity demanded of a certain good or service, typically with quantity on the horizontal axis and price on the vertical axis. Deadweight loss, on the other hand, represents the loss in social surplus that occurs when a market produces an inefficient quantity. This inefficiency can arise from various market failures, government interventions such as taxes and subsidies, or monopolistic market structures, where the price is higher and the quantity produced lower than the equilibrium price and quantity.