The efficient quantity prevails in a market when the market:
A)has the lowest average cost.
B)has benefit equal to cost.
C)yields the largest possible economic surplus.
D)costs exceed benefit by the largest margin.

Question

Quizplus · Accepted Answer

The efficient quantity is the amount of output at which the marginal benefit to society is equal to the marginal cost of production. This quantity yields the largest possible economic surplus, the difference between the total benefit and total cost of production. Therefore, choice C, "yields the largest possible economic surplus", is the correct answer.

The Efficient Quantity Prevails in a Market When the Market