Which statement is TRUE?
A)A competitive market pushes the quantity produced to its efficient level.
B)When the efficient quantity is produced, consumer surplus is minimized.
C)When the efficient quantity is produced, producer surplus is minimized.
D)When supply is greater than demand, producer surplus is less than consumer surplus.

Question

Quizplus · Accepted Answer

In a competitive market, producers compete with each other for customers and therefore must produce at an efficient level to stay competitive. This efficient level (where marginal cost equals marginal revenue) results in the maximum benefit for society as a whole. Producing more or less than this level would result in a decrease in overall welfare.

Which Statement Is TRUE