If the Equilibrium Quantity in a Market Is 200, Resources

question 112

True/False

If the equilibrium quantity in a market is 200, resources will be wasted and society made poorer if 250 units are produced.

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Definitions:

MC

Marginal Cost, the increase in total cost that arises from producing one additional unit of a good or service.

AVC

Average Variable Cost, the variable cost per unit of output.

Law Of Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if all other variables remain at a constant.

Marginal Output

The additional quantity of a product that is produced from using one more unit of an input, keeping other inputs constant.