The First Welfare Theorem states that the total surplus (consumer surplus + producer surplus) of a market is maximized if the market is unregulated, competitive, and with externalities. the total surplus (consumer surplus + producer surplus) of a market is maximized if the market is unregulated, competitive, and without externalities the total surplus (consumer surplus + producer surplus) of a market is maximized if the market has a market failure. the total surplus (consumer surplus + producer surplus) of a market is maximized if the market is regulated, competitive, and without externalities