If the market for grapefruit is in equilibrium without any outside intervention to change the equilibrium price:
A)total surplus is minimized.
B)there is some deadweight loss.
C)a few mutually beneficial trades are missed.
D)consumer and producer surplus are maximized.

Question

Quizplus · Accepted Answer

When the market for grapefruit is in equilibrium, it means that the quantity supplied is equal to the quantity demanded, and the price has reached a level where both consumers and producers are satisfied with their gains from trade. At this point, consumer surplus and producer surplus are maximized, and there is no deadweight loss. Moreover, all mutually beneficial trades are realized, and total surplus is optimized. Therefore, the best choice is D - consumer and producer surplus are maximized.

If the Market for Grapefruit Is in Equilibrium Without Any