Asked by
Himanshu Sharma
on Dec 19, 2024
Verified
Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?
A) Combined consumer and producer surplus will be maximized.
B) P = MC = lowest AVC.
C) The minimum willingness to pay equals the maximum acceptable price.
D) We would expect all of these to occur in the long run in a purely competitive market.
Purely Competitive
An ideal market scenario where there are many sellers and buyers, each small relative to the market, products are homogeneous, and there is free entry and exit from the market.
Producer Surplus
The divergence between the anticipated payment by producers for a good or service and the actual financial return they obtain.
- Pinpoint the traits and effects of entirely competitive marketplaces in enduring equilibrium.
- Understand the significance of maximizing consumer surplus and producer surplus in economic welfare.
Verified Answer
KP
Learning Objectives
- Pinpoint the traits and effects of entirely competitive marketplaces in enduring equilibrium.
- Understand the significance of maximizing consumer surplus and producer surplus in economic welfare.