A market is most efficient when Social or economic surplus is maximized Producer surplus is greater than social surplus Consumer surplus is equal to producer surplus Consumer surplus is greater than producer surplus

A market is most efficient when Social or economic surplus is maximized Producer surplus is greater than social surplus Consumer surplus is equal to producer surplus Consumer surplus is greater than producer surplus

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A market is most efficient when

Social or economic surplus is maximized

Producer surplus is greater than social surplus

Consumer surplus is equal to producer surplus

Consumer surplus is greater than producer surplus

Definition Definition Producer’s gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price and up to the equilibrium quantity.

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