The sum of consumers' surplus and producers' surplus is maximized at equilibrium.

Question

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At equilibrium, the market reaches a point where the quantity demanded equals the quantity supplied, resulting in the highest possible combined surplus. Consumers are willing to pay a maximum amount for a good, while producers are willing to sell it for a minimum amount. The difference between the maximum price a consumer is willing to pay and the market price is the consumers' surplus. The difference between the minimum price a producer is willing to sell for and the market price is the producers' surplus. At equilibrium, these surpluses are maximized, resulting in the most efficient outcome for both buyers and sellers in the market.

The Sum of Consumers' Surplus and Producers' Surplus Is Maximized