In a competitive market, the demand curve shows the ________ received by consumers and the supply curve shows the ________.
A)utility; average cost.
B)marginal benefit; marginal cost
C)economic surplus; opportunity cost
D)net benefit; net cost

Question

Quizplus · Accepted Answer

In a competitive market, the demand curve shows the marginal benefit received by consumers, as they are willing to pay higher prices for a good or service that they value highly. On the other hand, the supply curve shows the marginal cost incurred by producers, as they are willing to produce and sell more units of a good or service at higher prices that cover their costs and allow them to earn a profit. Hence, the matching of the marginal benefit and marginal cost at the equilibrium point determines the quantity and price that balance the market.

In a Competitive Market, the Demand Curve Shows the ________