In a perfectly competitive industry at equilibrium price and quantity that the
A)producer surplus exceeds the consumer surplus.
B)consumer and producer surplus is maximized.
C)consumer surplus exceeds producer surplus.
D)willingness of consumers to pay exceeds the opportunity cost of producing the product.

Question

Quizplus · Accepted Answer

In a perfectly competitive industry, both consumer and producer surplus are maximized at the equilibrium price and quantity. This means that the willingness of consumers to pay equals the opportunity cost of producing the product for producers, resulting in the efficient allocation of resources.

In a Perfectly Competitive Industry at Equilibrium Price and Quantity