Which of the Following Is True

question 119

Essay

Which of the following is true?
A.Profit-maximizing behavior occurs only in perfectly competitive markets.
B.Additional units of a good should be produced as long as MR < MC.
C.The profit-maximizing solution occurs where MR = MC.
D.The profit-maximizing solution occurs where MR > MC.

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Definitions:

Optimal Tax

A tax system designed to achieve the best balance between efficiency and equity.

Marginal Social Benefit

The supplementary gain for society derived from the consumption of one extra unit of a good or service.

Marginal Social Cost

The cost to society of producing an additional unit of a good or service, including both private costs and any externalities.

Marginal Social Benefit

The additional gain to society as a whole from an additional unit of a good or service.