What is maximised in a competitive market when marginal benefit equals marginal cost?

Question

Quizplus · Accepted Answer

In a competitive market, when marginal benefit equals marginal cost, the economic surplus is maximized. Economic surplus is the difference between the total benefit received by consumers (consumer surplus) and the total cost of production (producer surplus). Maximizing economic surplus means that society is getting the most benefit possible from the resources being used, and resources are being allocated efficiently. Therefore, C is the correct answer. A, B, and D are incorrect because they do not represent what is maximized in a competitive market when marginal benefit equals marginal cost.

What Is Maximised in a Competitive Market When Marginal Benefit