If a market is efficient, then
A) the market allocates buyers to the sellers who can produce the good at least cost.
B) all of these answers.
C) the quantity produced in the market maximizes the sum of consumer and producer surplus.
D) the market allocates output to the buyers that value it the most.

Question

Quizplus · Accepted Answer

An efficient market not only allocates buyers to the sellers who can produce the good at least cost (A) and allocates output to the buyers that value it the most (D), but it also maximizes the overall benefit to society by maximizing the sum of consumer and producer surplus (C). Therefore, all of these answers are true for an efficient market.

If a Market Is Efficient, Then