What Two Conditions Must Hold for a Competitive Market to Produce

Multiple Choice

What two conditions must hold for a competitive market to produce efficient outcomes?

A) Demand curves must reflect all costs of production, and supply curves must reflect consumers' full willingness to pay.
B) Supply curves must reflect all costs of production, and demand curves must reflect consumers' full willingness to pay.
C) Firms must minimize production costs, and consumers must minimize total expenditures.
D) Firms must maximize profits, and consumers must all pay prices equal to their maximum willingness to pay.