A Competitive Market with No Externalities Is Efficient When It

question 56

Multiple Choice

A competitive market with no externalities is efficient when it is in equilibrium because

• A) total benefit equals total cost.
• B) marginal benefit equals marginal cost.
• C) consumer surplus equals producer surplus.
• D) the sum of consumer surplus plus producer surplus is minimized.
• E) the deadweight gain equals its maximum.

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Definitions:

Other Revenues

Income a company generates from activities not related to its primary operations, such as interest income or gains from investments.

Effective Tax Rate

The average percentage of their total income that individuals or corporations pay in taxes.

Profit/(Loss) Realized

The actual gain or loss generated from completing a transaction.

Intercompany Sale

The sale of goods or services between divisions or subsidiaries within the same parent company.