If Equilibrium Is Achieved in a Competitive Market

question 2

Multiple Choice

If equilibrium is achieved in a competitive market

• A)there is no deadweight loss.
• B)the deadweight loss will be maximized.
• 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:

Real Terms

Values adjusted for inflation, reflecting the actual purchasing power.

Behavioral Economics

The study of psychology as it relates to the economic decision-making processes of individuals and institutions.

Economic Theory

A set of principles that aim to explain how economies work and how economic agents interact.

Consumer Decisions

The process by which consumers choose whether, what, when, from whom, and how much to buy of a product or service.