Economics Consumer Surplus And Producer Surplus Questions
Market efficiency refers to the degree to which resources are allocated optimally in a market. It is achieved when the market equilibrium is reached, where the quantity demanded by consumers equals the quantity supplied by producers at the prevailing market price. In an efficient market, there is no wastage of resources, and the allocation of goods and services maximizes overall societal welfare. Market efficiency is often measured by the presence of consumer surplus and producer surplus, which represent the additional benefits received by consumers and producers, respectively, beyond what they are willing to pay or receive. Overall, market efficiency ensures that resources are utilized in the most productive and beneficial manner, leading to an optimal allocation of goods and services.