In competitive equilibrium some consumers (namely those who are willing to pay only less than the competitive equilibrium price) are shut out of the market. so are the producers whose cost of production is above the competitive equilibrium price. nevertheless, we say that competitive equilibrium is efficient. what is the intuition behind this? in other words, how do you understand the efficient outcome being one that does not allow consumers with valuation lower than the competitive equilibrium price and producers with costs higher than the competitive equilibrium price to do transactions in the market?

1. which one of the following would be an example of a supply-side market failure? a. a gas station is slowly leaking diesel fuel from its underground tanks, and after the leak is discovered, the business immediately cleans up the pollution at its own expense. b. a gas station is slowly leaking diesel fuel from its underground tanks, but the state uses taxpayer money to clean up the pollution rather than requiring the business to pay. c. your business wants to attract repeat customers by putting on a customer-appreciation picnic at a public park, but you decide not to because you couldn't prevent noncustomers from consuming the food and entertainment you provided. d. everyone rushes to the local retail outlet at midnight on the day of the release of a new video game console, and the store runs out before everyone is able to buy one.