The Logic of Maximizing Behavior and Maximizing in the Marketplace
Maximizing in the Marketplace
ANSWER TO TRY IT! PROBLEM
On the assumption that the coffee market is competitive and that it is characterized by well-defined exclusive and transferable property rights, the coffee market meets the efficiency condition. That means that the allocation of resources shown at the equilibrium will be the one that maximizes the net benefit of all activities. The net benefit is shared by coffee consumers (as measured by consumer surplus) and coffee producers (as measured by producer surplus).