If the market for alpine skis is in competitive equilibrium, and there are no external costs or government interventions, then:
A)the sum of consumer surplus and producer surplus is maximized.
B)resources are being used efficiently.
C)the marginal benefit is equal to the marginal cost.
D)All of the other answer choices are correct.

Question

Quizplus · Accepted Answer

In a competitive equilibrium, the market is efficient and resources are being used in the most productive way. The only reason for a market to be in equilibrium is when the marginal benefit is equal to the marginal cost. The sum of consumer surplus and producer surplus is at its maximum level. There are no external costs or government interventions that could shift the equilibrium. Therefore, all of the answer choices are correct.

If the Market for Alpine Skis Is in Competitive Equilibrium