Jack is a prospective buyer of a commodity that Jill is offering to sell.Social surplus in this scenario can be maximized when ________.
A) only Jack is optimizing
B) only Jill is optimizing
C) both Jack and Jill are optimizing
D) neither Jack nor Jill is optimizing

Question

Quizplus · Accepted Answer

In order to maximize social surplus, both Jack and Jill need to optimize their decisions in terms of price and quantity. If only Jack is optimizing, he may not offer a price that is acceptable to Jill or purchase the desired quantity. Similarly, if only Jill is optimizing, she may set a price that is too high for Jack or not offer enough quantity. Therefore, the optimal solution for both parties can be reached only when both Jack and Jill are optimizing.

Jack Is a Prospective Buyer of a Commodity That Jill