Economic efficiency in a competitive market is achieved when
A)economic surplus is equal to consumer surplus.
B)consumers and producers are satisfied.
C)the marginal benefit equals the marginal cost from the last unit sold.
D)producer surplus equals the total amount firms receive from consumers minus the cost of production.

Question

Quizplus · Accepted Answer

Economic efficiency is achieved when the marginal benefit equals the marginal cost from the last unit sold. This is because at the point where MB=MC, there are no more gains from trade to be made without increasing costs, and no more gains from trade can be made without decreasing benefits. This is the point where the market is efficient, and all gains from trade have been exhausted.

Economic Efficiency in a Competitive Market Is Achieved When