Which of the Following Occurs When a Market Is Efficient

question 35

Multiple Choice

Which of the following occurs when a market is efficient?

• A) Consumer surplus equals producer surplus.
• B) Consumer surplus is as large as possible.
• C) Producer surplus is as large as possible.
• D) The sum of consumer surplus and producer surplus is maximized.
• E) The marginal benefit exceeds the marginal cost by as much as possible.

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Definitions:

Closing Entry

An accounting transaction recorded at the end of an accounting period to transfer the balances of temporary accounts to permanent ones.

Capital

Refers to financial assets or the financial value of assets, such as funds held in deposit accounts and/or funds obtained from special financing sources.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, used in preparing financial statements.