Which of the below statements is true?
A)It is efficient to produce beyond the equilibrium output level as long as costs are low.
B)The level of output that maximizes the value of an economy's output is found at the intersection of supply and demand in a competitive market.
C)Production and exchange is beneficial as long as the demand curve lies below the supply curve.
D)Mutually beneficial exchange is mostly harmful unless regulated.

Question

Quizplus · Accepted Answer

The statement "The level of output that maximizes the value of an economy's output is found at the intersection of supply and demand in a competitive market" is true according to the concept of allocative efficiency, which means that society is producing the optimal mix of goods and services that maximize the overall value to society. This occurs when the price of the good or service equals the marginal cost of producing it, which is achieved at the intersection of the supply and demand curves in a competitive market.

Which of the Below Statements Is True