In long-run equilibrium, purely competitive markets
A)minimize total cost.
B)maximize the sum of consumer surplus and producer surplus.
C)yield economic profits to most sellers.
D)inevitably degenerate into monopoly in increasing-cost industries.

Question

Quizplus · Accepted Answer

In long-run equilibrium, purely competitive markets maximize the sum of consumer surplus and producer surplus, which is a measure of total economic welfare. This occurs because prices adjust to reflect both the cost of production and the value to consumers, leading to an efficient allocation of resources.

In Long-Run Equilibrium, Purely Competitive Markets