Final answer:
The amount that is neither bought by consumers nor sold by producers at the equilibrium price is called deadweight loss. Deadweight loss represents the inefficiency in the market where the quantity traded is below the efficient level due to market distortions.
Step-by-step explanation:
The amount that is neither bought by consumers nor sold by producers at the equilibrium price is called deadweight loss. Deadweight loss represents the inefficiency in the market where the quantity traded is below the efficient level due to market distortions.
Deadweight loss occurs when consumer surplus and producer surplus are not maximized, which happens when the quantity exchanged is lower than the equilibrium quantity. It is represented by the area between the demand and supply curves that is not covered by consumer and producer surplus.
In the given context, deadweight loss refers to the area between point J on the demand curve and point K on the supply curve, which is not covered by consumer surplus or producer surplus.