Efficient markets:
A) maximize total surplus.
B) can occur without a central planner.
C) occur when a perfectly competitive, well-functioning market is in equilibrium.
D) All of these are correct.

Question

Quizplus · Accepted Answer

All of the given options are correct. Efficient markets are ones where resources are allocated to their most valued uses, resulting in the maximization of total surplus. They can occur without a central planner as long as there is competition and prices reflect the true costs and benefits. Finally, a perfectly competitive market in equilibrium is an example of an efficient market.

Efficient Markets