If Equilibrium Is Achieved in a Competitive Market, Then

question 124

Multiple Choice

If equilibrium is achieved in a competitive market, then

• A)there is no deadweight loss.
• B)the deadweight loss will be maximized.
• C)the deadweight loss will equal the sum of consumer surplus and producer surplus.
• D)the deadweight loss will be the same as the opportunity cost of the last unit of output sold.

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Definitions:

Capacity Utilization

A metric used to measure the rate at which potential output levels are being met or used in the production process.

Publicly Held Corporation

A company that sells its stocks or shares to the public on at least one stock exchange.

Gross Investment

The total amount spent on new fixed investment plus replacement investment, without accounting for depreciation.

Net Investment

The total amount spent on new capital assets minus the depreciation on existing assets.