When a Perfectly Competitive,well-Functioning Market Is in Equilibrium

question 64

Multiple Choice

When a perfectly competitive,well-functioning market is in equilibrium:

• A) total surplus is maximized.
• B) the market is efficient.
• C) deadweight loss is zero.
• D) All of these are true.

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Definitions:

Coordination Problems

Challenges that arise in aligning the plans and actions of multiple parties in order to achieve a common goal or optimize outcomes.

Economic Profit

is the excess of total revenue over the total costs, including both explicit and implicit costs.

Accounting Profit

Accounting profit is the net income a company reports on its financial statements, calculated as total revenues minus explicit costs and depreciation.

Marginal Product

The extra production obtained by employing an additional unit of a variable resource, while keeping the rest of the inputs unchanged.