If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximised, then

Question

Quizplus · Accepted Answer

When the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximised, it is known as allocative efficiency which is a criterion of economic efficiency. This outcome ensures that resources are allocated in the most efficient way possible, without any waste or underproduction of goods and services. Therefore, option B is the correct answer. Option A is incorrect because maximum deadweight loss occurs when the market is operating inefficiently. Option C is incorrect because this outcome does not necessarily maximise profits. Option D is incorrect because this outcome does not necessarily minimise costs.

If There Is a Market Outcome in Which the Marginal