In a competitive market, the gains to society are maximized under which of the conditions described below by marginal benefit, marginal cost, producer surplus, and consumer surplus, respectively?
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In a competitive market, the efficient equilibrium quantity produced is the quantity where marginal benefit equals marginal cost and the sum of consumer and producer surplus is maximized.
Producer surplus is most accurately defined as the:
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Producer surplus is the sum of the differences between the price received for each unit of good produced and the opportunity cost of each unit, for the total units produced. Producer surplus results when the market price for a good or service exceeds the marginal cost producing it.
The minimum supply price, the lowest price at which a producer is willing to supply an additional unit of a good, is:
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The minimum supply price that producers must receive if they are to produce an additional unit of output is the opportunity cost of producing that unit, i.e., the marginal cost. The marginal cost curve is the short-run supply curve for the good.
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