Total surplus is in which type of market will be highest?
A)Perfect competition
B)Monopoly
C)Equally in perfect competition and monopoly
D)Natural monopoly

Question

Quizplus · Accepted Answer

In perfect competition, the market is characterized by many buyers and sellers, homogeneous products, and free entry and exit. Due to the perfect competition, there is an absence of market power among buyers and sellers, which leads to achieving the allocation of resources among buyers and sellers' efficient equilibrium point. This efficient allocation of resources will lead to maximizing the total surplus for both buyers and sellers. Therefore, the total surplus in perfect competition will be the highest.

Total Surplus Is in Which Type of Market Will Be