If equilibrium is achieved in a competitive market where there is no government and tax the deadweight loss will equal the sum of consumer surplus and producer surplus. there is no deadweight loss. the deadweight loss will be the same as the opportunity cost the deadweight loss will be maximized

If equilibrium is achieved in a competitive market where there is no government and tax the deadweight loss will equal the sum of consumer surplus and producer surplus. there is no deadweight loss. the deadweight loss will be the same as the opportunity cost the deadweight loss will be maximized

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If equilibrium is achieved in a competitive market where there is no government and tax

the deadweight loss will equal the sum of consumer surplus and producer surplus.

there is no deadweight loss.

the deadweight loss will be the same as the opportunity cost

the deadweight loss will be maximized.

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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