At the Market Equilibrium, When Efficiency Is Attained, the Marginal

question 27

Multiple Choice

At the market equilibrium, when efficiency is attained, the marginal benefit ________ the marginal cost.

• A) is equal to
• B) is equal to the marginal deadweight loss which is equal to
• C) has no necessary relationship with
• D) is less than
• E) is greater than

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Definitions:

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to a stable market condition.

Surplus

The situation in which the quantity of a good or service supplied exceeds the quantity demanded at the current price; often occurs in markets where a price ceiling prevents the price from rising to its equilibrium level.

Market Price

The current price at which an asset or service can be bought or sold, determined by supply and demand.

Black Market

An illegal trading environment where goods or services are exchanged outside of government-sanctioned channels.