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Professional gero Top? Educational Tia University Login Mary la University Student Portal Login Youtube top3 Msie Mrketi auta teon Anadsen le 2 Assig Chapter 4 Chapter 4 Assignment Saved 9 Assume that candle wax is traded in a perfectly competitive market in which the demand curve captures buyers' f while the supply curve reflects all production costs. For each of the following situations, indicate whether the total increased, decreased, or kept the same in order to achieve allocative and productive efficiency. 10 points a. Maximum willingness to pay exceeds minimum acceptable price: (Click to select) b. MC> MB: Click to select)f c. Total surplus is at a maximum: Click to select) d. The current quantity produced exceeds the market equilibrium quantity: (Click to select) eBook Prit References

Explanation / Answer

A

Increased

With increase in consumer’s willingness to pay, the production should be increased so that demand is adequately catered and efficiency level is achieved.

B.

Decreased

For proper allocative and production efficiency, the MC should be equal to MB and output should be decreased to achieve it.

C.

Stay the same

Since, the total surplus is already maximized, then output is already achieving allocative and production efficiency.

D.

Decreased

Current situation, will create downward pressure upon the price. So, output should be decreased to be at equilibrium level.

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