We Can Say That the Allocation of Resources Is Efficient

question 27

Multiple Choice

We can say that the allocation of resources is efficient if

• A)producer surplus is maximized.
• B)consumer surplus is maximized.
• C)total surplus is maximized.
• D)sellers' costs are minimized.

---

Definitions:

Zero Economic Profits

A situation in which a firm's total revenues are exactly equal to its total costs, including opportunity costs, indicating neither an economic profit nor loss.

Long-Run Equilibrium

A market state where all producers and consumers have fully adjusted to all changes, and there are no forces causing further adjustments.

Production Costs

The total expense incurred in manufacturing a product or providing a service, including raw materials, labor, and overheads.

Marginal Revenue

The increase in revenue achieved by selling one additional unit of a product or service.