If the Marginal Cost of Producing Steel Exceeds the Marginal

question 146

Multiple Choice

If the marginal cost of producing steel exceeds the marginal utility of using steel, then for economic efficiency,

• A)the price of steel should fall.
• B)society should produce less steel.
• C)the price of goods made with steel should fall.
• D)society should direct resources toward steel production and away from the production of other goods.

---

Definitions:

Output

The cumulative quantity of products or services generated by a corporation, sector, or nation.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the quantity of output produced; represents the per unit cost of production.

Marginal Cost

The price increase caused by the creation of one more unit of a product or service.

Microsoft

An American multinational technology company known for its software, services, devices, and solutions.