At equilibrium in a perfectly competitive market: because the sum of consumer an

Question

At equilibrium in a perfectly competitive market: because the sum of consumer and producer surplus is minimized, allocative efficiency does not occur the sum of consumer and producer surplus is minimized and allocative efficiency occurs O the sum of consumer and producer surplus is zero and allocative efficiency occurs o because the sum of consumer and producer surplus is zero, allocative efficiency does not occur O allocative efficiency is achieved because the sum of consumer and producer surplus is maximized

Explanation / Answer

Option 5.

Explanation: In allocative efficiency, consumers are able to derive the maximum possible satisfaction from the current combination of goods and services being produced and sold by producers. This happens in perfect competition as the sum of consumer and producer surplus gets maximized.

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