When a market is internally efficient, it means that
A) the market has price continuity.
B) the market has minimal transactions costs.
C) the market has good depth.
D) the market has more buyers than sellers.
E) the market has more sellers than buyers.

Question

Quizplus · Accepted Answer

When a market is internally efficient, it means that there are minimal transactions costs, which implies that resources are allocated efficiently within the market. Price continuity ensures that there are no sudden fluctuations in price, but it is not a sufficient condition for internal efficiency. Depth refers to the ability of the market to absorb large transactions without significant changes in price, but it is not directly related to internal efficiency. The number of buyers and sellers in the market does not determine its internal efficiency.

When a Market Is Internally Efficient, It Means That