Question

When a competitive market maximizes economic surplus, it implies that the rev: 05_10_2018.a.marginal benefit of having the product is greater than the marginal cost.b.buyers are getting the maximum consumer surplus from the product.c.combined consumer and producer surplus is maximized.d.quantity demanded is lower than the quantity supplied.

Answer 1

The correct answer is letter C.

Explanation: Perfectly competitive markets are defined by two characteristics: The goods offered for sale are all the same and the buyers and sellers are so numerous that not a single buyer or seller can influence the market price. The wheat market is an example of a market with perfect competition.