In a Competitive Market with No Externalities

question 171

Multiple Choice

In a competitive market with no externalities,

• A) the consumer surplus is equal to zero because of competition.
• B) buyers cannot control the price, so the consumer surplus is zero.
• C) at the equilibrium price, marginal benefit exceeds marginal cost.
• D) at the equilibrium price, marginal benefit equals marginal cost.
• E) at the equilibrium price, the total amount of consumer surplus equals the total amount of producer surplus.

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Definitions:

Relative Market Shares

A metric comparing a company's market share to that of its largest competitor, highlighting competitive strength.

Hybrid Vehicles

Cars that use a combination of an internal combustion engine and one or more electric motors for propulsion, aiming to achieve better fuel efficiency and lower emissions than conventional vehicles.

BCG Business Portfolio

A matrix developed by the Boston Consulting Group to help businesses analyze their product lines or business units for strategic decision-making based on market growth and market share.

Compound Annual Growth Rate

The mean annual growth rate of an investment over a specified time period longer than one year, expressing the compound growth of an investment.