At the output where the combined amounts of consumer and producer surplus are largest,
A) the areas of consumer and producer surplus necessarily are equal.
B) the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output.
C) consumer surplus exceeds producer surplus by the greatest amount.
D) marginal beneﬁt exceeds marginal cost by the greatest amount.

Question

Quizplus · Accepted Answer

The combined amounts of consumer and producer surplus are largest at the efficient equilibrium quantity where marginal cost equals marginal benefit. At this point, the maximum willingness to pay for the last unit of output equals the minimum acceptable price that producers are willing to accept for that unit of output, resulting in the largest possible combined surplus. Therefore, choice B is the correct answer.

At the Output Where the Combined Amounts of Consumer and Producer