At an efficient market outcome,
A) consumer surplus exceeds producer surplus.
B) producer surplus exceeds consumer surplus.
C) the sum of consumer surplus and producer surplus is maximized.
D) marginal benefit is maximized.
E) the sum of consumer surplus and producer surplus is minimized.

Question

Quizplus · Accepted Answer

At an efficient market outcome, both consumers and producers are able to achieve the maximum possible amount of surplus. This means that the sum of consumer and producer surplus is maximized, and both parties are able to benefit. The efficient outcome is achieved when marginal benefit equals marginal cost, resulting in the highest possible level of net gain for both consumers and producers. Therefore, option C is the correct choice.

At an Efficient Market Outcome