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23 October, 01:56

In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal cost, then total surplus is maximized.

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  1. 23 October, 05:43
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    False

    Explanation:

    In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal cost, then total surplus is maximized.

    As for any extra unit produced

    Marginal Benefit > Marginal cost = Surplus

    Marginal Benefit = Marginal cost = No Surplus / No loss

    Marginal Benefit > Marginal cost = loss

    When your Marginal benefit is maximum and Marginal cost is minimum then the surplus will be maximized.

    Most efficient situation in which benefit is maximum and the cost is minimum results in maximized surplus.
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