FIGURE 5-5
-Refer to Figure 5-5.At the market-clearing price and quantity of $30 per hour and 4000 hours of gardening services,we can say that
A)economic surplus could be increased at a lower price because there would be more value to consumers.
B)economic surplus could be increased at a higher price because firms would generate more revenue.
C)economic surplus is maximized and the market is efficient.
D)the market is inefficient because there are some consumers who are not purchasing at this price.
E)the market is efficient because the government has imposed a market-clearing price and quantity.

Question

FIGURE 5-5
-Refer to Figure 5-5.At the market-clearing price and quantity of $30 per hour and 4000 hours of gardening services,we can say that
A)economic surplus could be increased at a lower price because there would be more value to consumers. 
B)economic surplus could be increased at a higher price because firms would generate more revenue. 
C)economic surplus is maximized and the market is efficient. 
D)the market is inefficient because there are some consumers who are not purchasing at this price. 
E)the market is efficient because the government has imposed a market-clearing price and quantity.

Quizplus · Accepted Answer

At the market-clearing price and quantity, economic surplus is maximized and the market is efficient. This means that both consumers and producers are able to achieve the greatest possible benefit from the exchange of goods and services, and there is no way to increase surplus without reducing efficiency.

FIGURE 5-5 -Refer to Figure 5-5.At the Market-Clearing Price and Quantity of Quantity