In a purely competitive market at its long-run equilibrium, which of the following is not true? aThe marginal benefit of the last unit of the product equals the marginal cost of producing that unit. bThe maximum willingness of buyers to pay for the last unit of the product equals the minimum acceptable price for the seller of that unit. cPrice equals marginal cost, and they are equal to the lowest attainable average cost of production. dThe combined amount of consumer and producer surpluses is at its minimum possible.

Perfect competition refers to the situation where there are many buyers and sellers exist in the…

Answered: In a purely competitive market at its…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 10PA

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In a purely competitive market at its long-run equilibrium, which of the following is not true?

	a	The marginal benefit of the last unit of the product equals the marginal cost of producing that unit.
	b	The maximum willingness of buyers to pay for the last unit of the product equals the minimum acceptable price for the seller of that unit.
	c	Price equals marginal cost, and they are equal to the lowest attainable average cost of production.
	d	The combined amount of consumer and producer surpluses is at its minimum possible.

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

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