Does an increase in economic surplus in a market always mean that the economic efficiency in the market has increased? Briefly explain.

Quesiton : Does an increase in economic surplus in a market always mean that the economic efficiency in the market has increased? Briefly explain.

Answer: If the marginal cost of production decreases but market output remains unchanged then economic surplus and deadweight loss would both increase decreasing economic efficiency.

Does an increase in economic surplus in a market always mean that the economic efficiency in the market has increased? Briefly explain. Economic efficiency . is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production; is a market outcome in which the sum of consumer surplus and producer surplus is at a maximum. No. If marginal cost of production decreases but market output stays the same economic surplus and deadweight loss both increase causing economic efficiency to decrease . 3 … Econ ch 4. a market outcoe where the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production AND which the sum of consumer surplus and producer surplus is at a … Other Answers. View the full answer No if the marginal benefit of consumption increases but market ... View the full answer Supply and Demand: The Market Mechanism All societies necessarily make economic choices . Society needs to make choices... View the full answer. Briefly explain whether you agree with the following statement: ... Does an increase in economic surplus in a market always mean that economic efficiency in the market has increased ? If the marginal cost of production decreases but market output remains . Being more than or in excess of what is needed or required. Surplus is an excess of something. No. If marginal cost of production decreases but market output stays the same economic surplus and deadweight loss both increase causing economic efficiency to decrease. 2.7 Does an increase in economic surplus in a market always mean that economic efficiency in the market has increased ? Briefly explain . While the firm sells 1 000 units of the product at this price there is a shortage in the market . This shortage can be cleared if price is increased to $10 per unit. The quantity demanded and supplied at this higher price will be 1 500 units. Mon Mar 14 2011 00:00:00 GMT+0530 (IST) · Best Answer: No it could mean that there could be a decreased demand for goods and/or services in that market . This would lead to an economic surplus without any actual increase in efficiency . This would lead to an economic surplus without any actual increase in efficiency . Key Terms. Recall that the consumer surplus is calculating the area between the demand curve and the price line for the quantity of goods sold. Assuming that there is no shift in demand an increase in price will therefore lead to a reduction in consumer surplus while a decrease in price will lead to an increase in consumer surplus .