Markets achieve an efficient allocation of resources when:
A)the government intervenes in the market.
B)the quantity demanded equals the quantity supplied.
C)property rights are assigned.
D)the producer surplus is zero.

Question

Quizplus · Accepted Answer

Markets achieve efficiency when the quantity demanded equals the quantity supplied, which is also known as the equilibrium point. At the equilibrium point, resources are allocated efficiently because all goods or services that can be produced at a lower cost are produced, and consumers who value the goods or services the most are able to purchase them. The other options, such as government intervention and producer surplus, can cause inefficiencies in the market. While property rights are important for creating a market system, they alone do not ensure efficiency.

Markets Achieve an Efficient Allocation of Resources When