Will equilibrium in a market always result in an outcome that is economically efficient? Explain
What will be an ideal response?
An economically efficient outcome means that at the equilibrium price the marginal benefit of the last unit of output sold is equal to its marginal cost. This will occur only in markets that are competitive (many buyers and many sellers) and there are no price controls.
You might also like to view...
Refer to the table above. If the word price of trousers is $18 per pair, then which of the following statements is true?
A) All the four countries will export trousers. B) All the four countries will import trousers. C) Country A and Country D will export trousers, whereas Country B and Country C will import trousers. D) Country A and Country D will import trousers, whereas Country B and Country C will export trousers.
Most of the goods produced in an economy are ________
A) private goods B) public goods C) club goods D) inferior goods
Suppose the price of a product increases from €50 to €70 and the quantity supplied rises from 40 a day to 80. What is the Price Elasticity of Supply?
a) 0.5. b) -0.5. c) 2.5. d) -2.5.
Since 1970, the annual inflation rate in the U.S. has been about 9.7 percent or more.
Answer the following statement true (T) or false (F)