A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it
A)maximizes both the total revenue for firms and the quantity supplied of the product.
B)maximizes the combined welfare of buyers and sellers.
C)minimizes costs and maximizes output.
D)minimizes the level of welfare payments.

Question

Quizplus · Accepted Answer

The equilibrium price is considered the best price in welfare economics because it maximizes the combined welfare of buyers and sellers, reflecting the most efficient allocation of resources where consumer surplus and producer surplus are optimized.

A Result of Welfare Economics Is That the Equilibrium Price