What Two Conditions Must Hold for a Competitive Market to Produce

question 218

Multiple Choice

What two conditions must hold for a competitive market to produce efficient outcomes?

• A)Demand curves must reflect all costs of production, and supply curves must reflect consumers' full willingness to pay.
• B)Supply curves must reflect all costs of production, and demand curves must reflect consumers' full willingness to pay.
• C)Firms must minimize production costs, and consumers must minimize total expenditures.
• D)Firms must maximize profits, and consumers must all pay prices equal to their maximum willingness to pay.

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