All of the following statements about the free market equilibrium output are equivalent except:

Question

Quizplus · Accepted Answer

In a free market equilibrium, total surplus is maximized (A), there is zero dead-weight loss (B), and there are no allocations that are Pareto preferred (C), meaning no one can be made better off without making someone else worse off. However, D is incorrect because stating there is positive dead-weight loss contradicts the concept of a free market equilibrium, where dead-weight loss is minimized or eliminated.

All of the Following Statements About the Free Market Equilibrium