Which of the Following Conditions Holds in an Economically Efficient

question 50

Multiple Choice

Which of the following conditions holds in an economically efficient competitive market equilibrium?

• A) The deadweight loss is positive but at a minimum.
• B) Producer and consumer surplus are exactly equal in size.
• C) There are no positive and no negative external effects from consumption and production.
• D) The marginal benefit of the last unit produced and consumed is maximised.

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Definitions:

Bad Debts Expense

An expense account reflecting amounts that are not expected to be collected from customers or clients previously extended credit.

Estimated Entry

An accounting entry made to record expected but not yet realized financial transactions or adjustments.

Net Realizable Value

The estimated selling price in the ordinary course of business, minus any costs reasonably expected to be incurred in completion, transportation, and selling.

Gross Accounts Receivable

The total amount owed to a business by its customers before adjusting for any allowances for doubtful accounts.