Efficiency occurs in a market when
A) the sum of consumer surplus and producer surplus is maximized.
B) consumer surplus is equal to producer surplus.
C) consumer surplus is less than producer surplus.
D) consumer surplus is greater than producer surplus.
E) total revenue is maximized.

Question

Quizplus · Accepted Answer

Efficiency occurs in a market when the sum of consumer surplus and producer surplus is maximized. This means that both consumers and producers are getting the greatest benefit possible in the market. Any other scenario (B, C, D, E) would result in a less efficient market outcome.

Efficiency Occurs in a Market When