In a purely competitive market at its long-run equilibrium, which of the following is not true?
A) Price equals marginal cost, and they are equal to the lowest attainable average cost of production.
B) The marginal benefit of the last unit of the product equals the marginal cost of producing that unit.
C) The maximum willingness of buyers to pay for the last unit of the product equals the minimum acceptable price for the seller of that unit.
D) The combined amount of consumer and producer surpluses is at its minimum possible.

Question

Quizplus · Accepted Answer

At the long-run equilibrium in a purely competitive market, the combined amount of consumer and producer surpluses is at its maximum possible. This is because both consumers and producers are able to achieve their respective goals without anyone being able to gain more at the expense of the other. Therefore, option D is not true. Options A, B, and C are true statements about a purely competitive market at its long-run equilibrium.

In a Purely Competitive Market at Its Long-Run Equilibrium, Which