Asked by Maria del Mar Ribas on Jul 27, 2024
Verified
When a market is efficient:
A) there is no way to make some people better off without making other people worse off.
B) consumers who value buying a good the least are the ones who can purchase the good.
C) producers whose willingness to accept a price above the market price can sell their good.
D) there are ways to make everyone better off.
Efficient Market
A market where all relevant information is quickly and correctly reflected in securities prices, ensuring that transactions are made fairly and accurately.
Producer Surplus
The difference between what producers are willing to accept for a good or service and the actual price they receive.
- Recognize the conditions for market efficiency and the potential effects of deviations from equilibrium.
Verified Answer
ZK
Zybrea KnightAug 02, 2024
Final Answer :
A
Explanation :
In an efficient market, resources are allocated in the most effective way, meaning that it's not possible to improve one person's situation without worsening another's. This concept is closely related to Pareto efficiency. Choices B, C, and D describe scenarios that do not necessarily align with market efficiency.
Learning Objectives
- Recognize the conditions for market efficiency and the potential effects of deviations from equilibrium.