In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal cost, then total surplus is maximized.

true/false

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Business

Morse

21 January, 17:58

In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal cost, then total surplus is maximized.

true/false

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Answers (1)

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Ansley · Answer 1

False

Explanation:

In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal cost, then total surplus is maximized.

As for any extra unit produced

Marginal Benefit > Marginal cost = Surplus

Marginal Benefit = Marginal cost = No Surplus / No loss

Marginal Benefit > Marginal cost = loss

When your Marginal benefit is maximum and Marginal cost is minimum then the surplus will be maximized.

Most efficient situation in which benefit is maximum and the cost is minimum results in maximized surplus.

In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal cost, then total surplus is maximized.true/false

In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal cost, then total surplus is maximized.

true/false