Efficiency in a market is achieved when
A)a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs.
B)the sum of producer surplus and consumer surplus is maximized.
C)all firms are producing the good at the same low cost per unit.
D)no buyer is willing to pay more than the equilibrium price for any unit of the good.

Question

Quizplus · Accepted Answer

Efficiency in a market is considered to be achieved when the total welfare, represented by the sum of producer surplus and consumer surplus, is maximized. This condition reflects the optimal allocation of resources where no additional trade can make one party better off without making another party worse off.

Efficiency in a Market Is Achieved When