A competitive market outcome
A) maximizes total surplus.
B) generates equality among the members of society.
C) minimizes total surplus.
D) both maximizes total surplus and generates equality among the members of society.

Question

Quizplus · Accepted Answer

In a competitive market outcome, the forces of supply and demand result in an equilibrium price and quantity that maximizes total surplus (consumer surplus + producer surplus). While it does not necessarily generate equality among the members of society, it does lead to an efficient allocation of resources and overall societal welfare.

A Competitive Market Outcome