If a market is efficient, then

Question

Quizplus · Accepted Answer

If a market is efficient, it means that all relevant information is quickly incorporated into prices, which reflects the true value of goods and services. This ensures that buyers are allocated to sellers who can produce the good at least cost, and output is allocated to buyers that value it the most. The quantity produced in the market also maximizes the sum of consumer and producer surplus. Therefore, all of the given choices are correct.

If a Market Is Efficient, Then