Economic efficiency is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the marginal cost of production, and in which

Question

Quizplus · Accepted Answer

Economic efficiency is achieved when the marginal benefit of consuming a good is equal to its marginal cost of production. This implies that the quantity produced and consumed is optimal - society gets the maximum benefit from the resources used in producing the good. The maximum benefit is achieved when the sum of consumer surplus (the difference between what consumers are willing to pay and what they actually pay) and producer surplus (the difference between the price producers receive and the cost of production) is maximized. Therefore, choice A is correct. Choices B, C, and D are incorrect.

Economic Efficiency Is Defined as a Market Outcome in Which