In a competitive market equilibrium,
A)total consumer surplus equals total producer surplus.
B)marginal benefit and marginal cost are maximized.
C)consumers and producers benefit equally.
D)the marginal benefit equals the marginal cost of the last unit sold.

Question

Quizplus · Accepted Answer

In a competitive market equilibrium, the market reaches a point where the quantity demanded is equal to the quantity supplied, which means that the marginal benefit (the value that consumers place on the last unit consumed) is equal to the marginal cost (the cost of producing the last unit sold) for the market as a whole. Therefore, D is the best answer. A, B, and C are not necessarily true in all cases, as the distribution of surplus (consumer or producer) may vary depending on the specific market conditions.

In a Competitive Market Equilibrium