Asked by alexis nuara on Jun 01, 2024
Verified
In terms of consumer and producer surplus, when is economic efficiency achieved?
Consumer Surplus
The discrepancy between what consumers are prepared and can afford to spend on a product or service versus what they end up paying.
Producer Surplus
The difference between the amount a producer is willing to accept for a good or service and the actual amount received when it is sold.
Economic Efficiency
The optimal allocation of resources to maximize productivity and meet consumer demand most effectively.
- Comprehend economic efficiency in terms of consumer and producer surplus.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
Economic efficiency is achieved when consumer surplus and producer surplus combined are maximized. This means that total surplus is maximized, and the market will produce only units for which benefits are at least equal to costs.
Learning Objectives
- Comprehend economic efficiency in terms of consumer and producer surplus.