Figure 7-24
-Refer to Figure 7-24.If 6 units of the good are produced and sold,then
A)efficiency is achieved in this market.
B)the marginal value to buyers equals the marginal cost to sellers.
C)the sum of consumer surplus and producer surplus is maximized.
D)All of the above are correct.

Question

Figure 7-24 
-Refer to Figure 7-24.If 6 units of the good are produced and sold,then
A)efficiency is achieved in this market. 
B)the marginal value to buyers equals the marginal cost to sellers. 
C)the sum of consumer surplus and producer surplus is maximized. 
D)All of the above are correct.

Quizplus · Accepted Answer

When 6 units of the good are produced and sold, the market reaches equilibrium where the quantity demanded equals the quantity supplied. At this point, both the buyers and sellers are satisfied with the price and quantity sold. This implies that the market is efficient, as there is no waste of resources. Moreover, at this equilibrium point, the marginal value to buyers equals the marginal cost to sellers, and hence the market is Pareto efficient. Finally, the sum of consumer surplus and producer surplus is maximized, indicating that the welfare of both buyers and sellers is maximized. Therefore, all of the above options are correct.

Figure 7-24 -Refer to Figure 7-24.If 6 Units of the Good Are