For markets operating at quantities lower than the equilibrium quantity that would be produced in an equivalent perfectly competitive market: A)the outcome is efficient. B)total surplus is increased. C)consumer surplus is always increased. D)total surplus for society is reduced.

Question

Quizplus · Accepted Answer

In markets operating at quantities lower than the equilibrium quantity, the outcome is inefficient because not all mutually beneficial trades are being made. This inefficiency leads to a reduction in the total surplus for society, as some potential gains from trade are not realized.

For Markets Operating at Quantities Lower Than the Equilibrium Quantity