In general,the sum of consumer and producer surplus is maximized under the conditions of
A)perfect competition.
B)monopoly.
C)monopolistic competition.
D)oligopoly.
E)any market structure.

Question

Quizplus · Accepted Answer

Perfect competition is characterized by numerous buyers and sellers, homogeneous products, free entry and exit, and perfect information. Under these conditions, the market reaches an efficient allocation of resources where the sum of consumer and producer surplus is maximized. Any deviation from perfect competition, such as monopoly or oligopoly, can result in inefficiencies and reduced overall surplus. Therefore, A is the best choice as it represents the ideal conditions for maximizing the sum of consumer and producer surplus.

In General,the Sum of Consumer and Producer Surplus Is Maximized