At the Current Level of Output, the Marginal Social Cost

question 231

Multiple Choice

At the current level of output, the marginal social cost of tennis balls is greater than the marginal social benefit. Then

• A) more than the efficient quantity of tennis balls is being produced.
• B) there is excess demand for tennis balls.
• C) firms producing tennis balls must be earning negative profit.
• D) too few tennis balls are being produced.

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Definitions:

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