When the efficient quantity is produced
A)marginal social benefit equals marginal social cost.
B)the quantity demanded equals the quantity supplied.
C)resources are used in the activities in which they are most highly valued.
D)the sum of consumer surplus and producer surplus is maximized.
E)all of the above.

Question

Quizplus · Accepted Answer

When the efficient quantity is produced, it means that the market is in equilibrium where the quantity supplied equals the quantity demanded (B), resulting in a price where marginal social benefit (MSB) equals marginal social cost (MSC) (A). This allocation of resources is efficient because it maximizes total surplus (consumer surplus + producer surplus) (D). Thus, all of the above options are correct (E).

When the Efficient Quantity Is Produced