Which of the Following Statements Is False

question 139

Multiple Choice

Which of the following statements is false?

• A)The sum of producer and consumer surplus is maximized when equilibrium is achieved.
• B)Any successful effort to keep price from going to equilibrium decreases the sum of producer and consumer surplus in a market.
• C)The sum of producer and consumer surplus is maximized when Pareto efficiency is achieved.
• D)Consumer surplus is at its maximum when the price of a product is zero.
• E)Producer surplus is all that is maximized when Pareto efficiency is achieved.

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Definitions:

Internalize

The process by which a company takes into account the external costs (or benefits) of its activities, usually environmental, by incorporating them into its business decisions and cost structures.

Market Supply Curve

A graphical representation of the relationship between the price of a good or service and the amount of it that suppliers are willing to offer for sale at any given price level.

External Effects

In economics, externalities or external effects occur when the actions of individuals or firms have positive or negative impacts on third parties not directly involved in the transaction.

Demand

Refers to the quantity of a good or service that consumers are willing and able to purchase at different prices at a given time.