If Resources Are Allocated Efficiently

question 50

Multiple Choice

If resources are allocated efficiently,

• A)consumer surplus exceeds producer surplus.
• B)producer surplus exceeds consumer surplus.
• C)the sum of consumer surplus and producer surplus is maximized.
• D)marginal social benefit is maximized.
• E)marginal social cost is minimized.

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Definitions:

Competition

The economic rivalry between companies or individuals for a larger share of a market, leading to better quality products and services at lower prices.

Competition

The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix.

Independently Acting Buyers

are consumers who make purchasing decisions based on their own preferences and circumstances, without coordinating with others.

Freedom to Enter

The condition in a market where new firms can enter the industry without facing prohibitive barriers or regulations.