If there are no external costs or benefits, no price or quantity regulations, no taxes or subsidies, and the good is not a public good or a common resource, then efficiency is
A) achieved when a monopoly produces the good.
B) achieved when the amount of output exceeds the amount produced in a competitive market.
C) achieved when the good is produced in a competitive market.
D) unrelated to the amount produced in a competitive market.

Question

Quizplus · Accepted Answer

Efficiency is achieved in a competitive market under the conditions described because all firms and consumers act as price takers, leading to an equilibrium where the quantity supplied equals the quantity demanded, and marginal cost equals marginal benefit, maximizing total surplus.

If There Are No External Costs or Benefits, No Price