Scenario: The table below shows the reservation values of ten buyers and a seller for a loaf of bread. Each buyer would buy at most one loaf and the seller can make up to ten loaves.

-Refer to the scenario above.What is the efficient outcome? What is the social surplus at the efficient outcome?

Question

Scenario: The table below shows the reservation values of ten buyers and a seller for a loaf of bread. Each buyer would buy at most one loaf and the seller can make up to ten loaves.
 
-Refer to the scenario above.What is the efficient outcome? What is the social surplus at the efficient outcome?

Quizplus · Accepted Answer

The efficient outcome in a market occurs when the quantity supplied equals the quantity demanded at a price that maximizes the total surplus, which is the sum of consumer surplus and producer surplus. Choice B suggests that buyers 1-6 buy from sellers 1-6, indicating that the market clears with these transactions, assuming the values given to buyers and costs for sellers align to make these trades beneficial for both parties. The social surplus at this efficient outcome is stated to be $12.00, which would be the result of maximizing the benefits to both buyers and sellers within the given constraints.

Scenario: the Table Below Shows the Reservation Values of Ten