If there is allocative efficiency in a purely competitive market for a product, the maximum price consumers are willing to pay is A) greater than marginal cost. B) equal to the amount of efficiency or dead-weight losses. C) equal to the minimum price producers are willing to accept. D) less than marginal benefit.
Added by Elizabeth N.
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In other words, the value that consumers place on the good is equal to the cost of producing it. This is the optimal allocation of resources because it maximizes the total surplus in the market. Now let's analyze each option: A) Greater than marginal cost: If Show more…
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