-The figure above shows the market for pants. If the efficient quantity is produced,
A) the consumer surplus on all the pants must equal the producer surplus on all the pants.
B) the sum of consumer and producer surplus will be maximised.
C) a small deadweight loss will result.
D) the sum of consumer and producer surplus will be minimised.
E) there will be no consumer surplus.

Question

-The figure above shows the market for pants. If the efficient quantity is produced,
A) the consumer surplus on all the pants must equal the producer surplus on all the pants. 
B) the sum of consumer and producer surplus will be maximised. 
C) a small deadweight loss will result. 
D) the sum of consumer and producer surplus will be minimised. 
E) there will be no consumer surplus.

Quizplus · Accepted Answer

When the efficient quantity is produced in a market, it maximizes the total welfare, which is the sum of consumer and producer surplus. This is because resources are allocated in the most efficient way possible, where the marginal benefit to consumers equals the marginal cost of production.

-The Figure Above Shows the Market for Pants