Economic efficiency is a market outcome in which the marginal benefit of consumers is equal to the marginal cost of production and the sum of consumer surplus and producer surplus is maximized.

Question

Quizplus · Accepted Answer

Economic efficiency is defined as a state where the marginal benefit (the additional benefit received from consuming one additional unit of a good or service) equals the marginal cost (the cost of producing one additional unit of a good or service). At this equilibrium point, the sum of consumer surplus (the difference between what a consumer is willing to pay and what they actually pay) and producer surplus (the difference between the price a producer receives and the marginal cost of producing a good) is maximized. Therefore, the statement is true.

Economic Efficiency Is a Market Outcome in Which the Marginal