A Competitive Market Produces the Economically Efficient Outcome If the Following

question 126

Multiple Choice

A competitive market produces the economically efficient outcome if the following conditions are met, except

• A)the market produces only units for which benefits are at least equal to cost.
• B)the market demand curve reflects the buyers' full willingness to pay.
• C)the market supply curve reflects all costs of production.
• D)the market produces only units for which costs are at least equal to benefits.

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Definitions:

Rent

The price paid for the use of property or land, typically on a periodic basis by tenants to landlords.

Average Total Cost Curve

A graphical representation that shows the average total cost of producing different quantities of a good.

Diminishing Returns

A principle stating that if one factor of production is increased while other factors are held constant, the output per unit of the variable factor will eventually decrease.

Output Levels

Quantities of products or services produced within a given timeframe, reflecting the scale of a company's or industry's production.