When property rights are well defined and markets are competitive, the
A) market equilibrium violates the conditions for economic efficiency.
B) market equilibrium is consistent with economic efficiency.
C) conditions necessary for economic efficiency no longer apply.
D) quantity supplied will rarely equal the quantity demanded.

Question

Quizplus · Accepted Answer

When property rights are well defined and markets are competitive, the market equilibrium is consistent with economic efficiency because resources are allocated in a way that maximizes total surplus, with no externalities or market failures present.

When Property Rights Are Well Defined and Markets Are Competitive