Economists say competitive markets are efficient because:

a. by producing in the output range where MB > MC, profits are earned and the difference between consumer surplus and producer surplus is maximized.

b. by producing in the output range where MB < MC, profits are reduced and the difference between consumer surplus and producer surplus is maximized.

c. by producing up to the point where MB > MC, profits are earned and the difference between the consumer surplus and producer surplus is maximized.

d. by producing up to the point where MB = MC, profits are maximized and the difference between the consumer surplus and producer surplus is maximized.

Question

04-03-2020
Business

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Economists say competitive markets are efficient because:

a. by producing in the output range where MB > MC, profits are earned and the difference between consumer surplus and producer surplus is maximized.

b. by producing in the output range where MB < MC, profits are reduced and the difference between consumer surplus and producer surplus is maximized.

c. by producing up to the point where MB > MC, profits are earned and the difference between the consumer surplus and producer surplus is maximized.

d. by producing up to the point where MB = MC, profits are maximized and the difference between the consumer surplus and producer surplus is maximized.

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bratislava bratislava · Answer 1 · 2020-03-08T15:01:26+01:00

Answer:

d. by producing up to the point where MB = MC, profits are maximized and the difference between the consumer surplus and producer surplus is maximized

Explanation:

An economist says that the competitive markets are more effective due to the fact that the profits are maximized and this is shown the difference between the consumer surplus and producer surplus. Where the marginal benefit is equal o the marginal costs.