Which of the following occurs when a market is efficient?
A) Producers earn the highest income possible.
B) Production costs equal total benefit.
C) Consumer surplus equals producer surplus.
D) Scarce resources are used to produce the goods and services that people value most highly.
E) Every consumer has all of the good or service he or she wants.

Question

Quizplus · Accepted Answer

When a market is efficient, scarce resources are used to produce the goods and services that people value most highly. This means that resources are being allocated efficiently to meet consumer demand and maximize overall welfare. It does not necessarily mean that producers earn the highest income possible, that production costs equal total benefit, or that every consumer has all of the good or service they want. Consumer surplus and producer surplus may not necessarily be equal in an efficient market.

Which of the Following Occurs When a Market Is Efficient