Question:

How is total surplus maximized at the competitive equilibrium?

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i mean "why" is total surplus maximised...

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  1. It means that at purely competitive markets producer can't set prices and is price-taker. Under such conditions supply curve falls to lowest possible point maximizing total surplus and producers cant' increase their surplus by the cost of consumer surplus.


  2. What do you mean with: "How".

    It is maximized at the maximum it could be!

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