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Loss is the value of the economic surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium. a) true b) false
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Loss is the value of the economic surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium.

a) true
b) false

User Jerry Saravia
by
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1 Answer

4 votes

Answer:

True (Dead-weight loss )

Step-by-step explanation:

When the market is not allowed to adjust towards the equilibrium the economics efficiency is lost. When the supply is excessive compared to demand some part of supply remains intact, which means that small of amount of supply does not contribute to economics and allocation efficiency and considered as a dead-weight loss. The supply is forgone because the market is not allowed to stabilise.

User Ryan Silva
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