Asked by Janay Johnson on Jul 03, 2024
Verified
Define the term efficiency loss. What is the other term for this?
Efficiency Loss
The loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is not achievable.
- Understand the concepts of consumer and producer surplus, along with the loss of efficiency, and associate them with the dynamics of the market.
Verified Answer
JM
John Meynard ParasJul 09, 2024
Final Answer :
Efficiency loss refers to reductions in combined consumer and producer surplus caused by an underallocation or overallocation of resources to the production of a good or service. Also called deadweight loss.
Learning Objectives
- Understand the concepts of consumer and producer surplus, along with the loss of efficiency, and associate them with the dynamics of the market.
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