A competitive market produces the economically efficient outcome if the following conditions are met, except Multiple Choice

A. the market produces only units for which benefits are at least equal to cost

B. the market produces only units for which costs are at least equal to benefits.

C. the market supply curve reflects all costs of production

D. the market demand curve reflects the buyers' full willingness to pay

Question

Business

Meadow Livingston

11 December, 01:40

A competitive market produces the economically efficient outcome if the following conditions are met, except Multiple Choice

A. the market produces only units for which benefits are at least equal to cost

B. the market produces only units for which costs are at least equal to benefits.

C. the market supply curve reflects all costs of production

D. the market demand curve reflects the buyers' full willingness to pay

+4

Answers (1)

Know the Answer?

Reyna Key · Answer 1

The correct answer is (a)

Explanation:

In a competitive market, numerous producers compete to provide homogeneous goods to the customers. As many producers produce homogeneous goods which is why they are price takers, and they produce goods as long as it equals the marginal cost. So, in a competitive market, units are produced for which benefits are equal to the cost.

Marginal cost = Marginal revenue