If Equilibrium Is Achieved in a Competitive Market

question 76

Multiple Choice

If equilibrium is achieved in a competitive market,

• A)there is no deadweight loss.
• B)the deadweight loss will be maximised.
• C)the deadweight loss will equal the sum of consumer surplus and producer surplus.
• D)the deadweight loss will be the same as the opportunity cost of the last unit of output sold.

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Definitions:

Demand Curves

illustrate the relationship between the price of a good and the quantity demanded, typically showing a downward slope indicating that demand decreases as price increases.

Price Decrease

A reduction in the cost at which a good or service is sold, often aimed at increasing demand or sales volume.

Linear Demand Curve

A graphical representation showing a direct relationship between the quantity of goods consumers are willing to buy and the price of those goods.

Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price.