If a market produces a level of output below the competitive equilibrium,then
A) social welfare is not maximized.
B) consumer surplus might still be maximized.
C) the actual price will be below the equilibrium price.
D) social welfare might still be enhanced if a price ceiling keeps price below the competitive price.

Question

Quizplus · Accepted Answer

In a competitive equilibrium, social welfare is maximized. Therefore, producing a level of output below the competitive equilibrium would mean that social welfare is not maximized.

If a Market Produces a Level of Output Below the Competitive