If the current allocation of resources in the market for wallpaper is efficient, then it must be the case that

a. producer surplus equals consumer surplus in the market for wallpaper.

b. the market for wallpaper is in equilibrium.

c. on the last unit of wallpaper that was produced and sold, the value to buyers exceeded the cost to sellers.

d. All of the above are correct.

Question

Business

Georgia Shields

14 June, 05:06

If the current allocation of resources in the market for wallpaper is efficient, then it must be the case that

a. producer surplus equals consumer surplus in the market for wallpaper.

b. the market for wallpaper is in equilibrium.

c. on the last unit of wallpaper that was produced and sold, the value to buyers exceeded the cost to sellers.

d. All of the above are correct.

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Answers (1)

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Beau · Answer 1

b. the market for wallpaper is in equilibrium.

Explanation:

Efficient allocation of resources means that the cost to produce the last unit of wallpaper and the benefit from that unit equals.

It must be the case that the cost of obtaining the product (which is equal to the benefit to the buyers) is the same as the cost of producing the product. That is the price.

The quantity where demand and supply meets in the equilibrium quantity (supply curve intersect demand curve)

That's the market equilibrium, where the price and quantity that buyers are willing to buy and suppliers are willing to sell is the same.