Which of the Following Conditions Does Not Need to Occur

question 24

Multiple Choice

Which of the following conditions does not need to occur for a market to achieve allocative efficiency?

• A)Consumers' maximum willingness to pay equals producers' minimum acceptable price for the last unit of output.
• B)The sum of producer and consumer surplus is maximized.
• C)The total revenue received by producers equals the total cost of production.
• D)The marginal benefit of the last unit produced equals the marginal cost of producing that unit.

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Definitions:

Good Increases

A term that is not well-defined in an economic context; possibly refers to growth in the quality or quantity of goods.

Labor

Human effort used in production which can include physical and mental contribution.

Price-Taking Farmer

An agricultural producer who has no control over the prices of the products they sell and must accept the prevailing market prices.

Corn Output

The total amount of corn produced, often considered in agricultural and economic studies regarding productivity and market supply.