Say a market is efficient. Which of the following occurs? Question 1 options: Consumer surplus equals producer surplus. Production costs equal total benefit. Every consumer has all of the good or service he or she wants. Producers earn the highest income possible. Scarce resources are used to produce the goods and services that people value most highly.

Say a market is efficient. Which of the following occurs? Question 1 options: Consumer surplus equals producer surplus. Production costs equal total benefit. Every consumer has all of the good or service he or she wants. Producers earn the highest income possible. Scarce resources are used to produce the goods and services that people value most highly.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter7: Demand And Supply

Section: Chapter Questions

Problem 7AA

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What condition is NOT required in the definition of a competitive market? Question 1 options: There are many buyers and sellers Firms can freely enter the market Sellers dislike each other because of the strong competition The goods offered by the various sellers are identical (or almost identical)
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In a market, the consumer surplus is 800,000 units and the producer surplus is 100,000. Which of the following statement is true? Group of answer choices The market is efficient since marginal benefit is equal to marginal cost. The market is inefficient since consumer surplus is greater than producer surplus and marginal benefit is equal to marginal cost. The market is efficient since consumer gain more than the producer. The market is inefficient since consumer surplus is greater than producer surplus.
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Step 1 In the free market, the equilibrium quantity and demand is determined by the forces of demand curve and supply curve. Demand is the want of consumer backed by the purchasing power. The demand is downward sloping due to negative relationship between price and quantity demanded, other things being constant. Supply is the quantity seller is willing to sell in the market at the given price level. The supply curve is upward sloping due to positive relationship between the price and quantity supplied, other things being constant. Step 2 From the given data, plot the demand and supply on graph representing quantity on the horizontal axis and the price on the vertical axis as shown in figure below: The downward sloping demand curve intersects the upward sloping supply curve at point E corresponding to which price is $5 and quantity is 12 units. b. Subsidies is the negative tax, that is, it is given by the government to the citizens in exchange of production or consumption.…
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	Consumer surplus equals producer surplus.
	Production costs equal total benefit.
	Every consumer has all of the good or service he or she wants.
	Producers earn the highest income possible.
	Scarce resources are used to produce the goods and services that people value most highly.