Resource use is efficient when we produce goods and services that people value most highly. A) whenever marginal cost exceeds marginal benefit. B) when the maximum possible quantity is being produced. C) when marginal benefit equals marginal cost.
Refer to Exhibit 24-8. The marginal cost of the last unit produced at the profit-maximizing output level equals $31. For a monopoly firm, marginal revenue equals marginal cost at 100 units (of output). At 100 units, price is above marginal cost. It follows that the monopoly firm is not resource-allocative efficient. Refer to Exhibit 24-7.
Any quantity above 6 units is too much. For a perfectly competitive firm, a. marginal revenue is equal to price. b. price is equal to marginal cost at the output level that maximizes profit.
b. the opportunity cost (of producing the good on the horizontal axis) rises as more of the good is produced. Productive efficiency implies that a.all consumers' wants are satisfied.