Efficiency in a Market Occurs When the Production of the Good

question 338

Multiple Choice

Efficiency in a market occurs when the production of the good is such that

• A) marginal benefit exceeds marginal cost.
• B) marginal benefit equals marginal cost.
• C) marginal benefit is lower than marginal cost.
• D) the marginal cost stops increasing.
• E) marginal benefit exceeds marginal cost by the maximum amount possible.

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Definitions:

Market Price

The present cost at which a product or service is available for purchase or sale in the market.

Market Price

The current value at which a good or service can be bought or sold in a marketplace, influenced by supply and demand.

Profit-Maximizing

Refers to the process or strategy aimed at achieving the highest possible profit, where marginal cost equals marginal revenue.

Total Revenue

The total income received by a company or market sector from the sale of goods or services, calculated as the unit price times the quantity sold.