When Efficiency Is Attained,the Consumer Surplus

question 19

Multiple Choice

When efficiency is attained,the consumer surplus

• A) must be larger than the producer surplus.
• B) must be smaller than the producer surplus.
• C) must equal the producer surplus.
• D) can be either smaller than or larger than but cannot equal the producer surplus.
• E) can be smaller than, equal to, or larger than the producer surplus.

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Definitions:

Surplus

The amount of an asset or resource that exceeds the portion used. In economics, it refers to a situation where supply exceeds demand.

Shortage

A situation in which demand for a good or service exceeds the available supply at the current price.

Market Equilibrium

Market equilibrium is the point where the supply of goods matches demand, leading to a stable market price.

Equilibrium Price

The rate at which the supply of a commodity or service aligns with its demand in the market.