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

In a purely competitive market at its long-run equilibrium, the combined amount of consumer and producer surpluses is maximized, not minimized. This is because resources are allocated in the most efficient way possible, where the price equals marginal cost and the value to consumers is maximized.

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