Efficiency in a Market Is Achieved When

question 216

Multiple Choice

Efficiency in a market is achieved when

• A)a social planner intervenes and sets the quantity of output after evaluating buyers' willingness to pay and sellers' costs.
• B)the sum of producer surplus and consumer surplus is maximized.
• C)all firms are producing the good at the same low cost per unit.
• D)no buyer is willing to pay more than the equilibrium price for any unit of the good.

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Definitions:

Market Price

The prevailing market price for an asset or service available for trade or acquisition.

Semiannual Coupon Rate

The interest rate on a bond or fixed-income security that is paid out to investors twice a year.

Current Yield

This term denotes the annual income (interest or dividends) divided by the current price of the security, often used in reference to bonds.

Par Value

The face value of a bond or the stock value stated in the corporate charter, which is often different from its market value.