Economists typically measure efficiency using
A)the price paid by buyers.
B)the quantity supplied by sellers.
C)total surplus.
D)profits to firms.

Question

Quizplus · Accepted Answer

Efficiency is usually measured by the extent to which markets achieve total surplus, which is defined as the sum of consumer surplus and producer surplus. Total surplus represents the net gain to society from allowing a transaction to occur. Therefore, option C is the best choice to answer this question. Options A, B, and D are not correct because they do not capture the overall efficiency of the market. These measures may provide information about the behavior of individual buyers, sellers, or firms, but they do not provide an overall assessment of how well the market is functioning.

Economists Typically Measure Efficiency Using