When less than the efficient amount of a good is produced, how does the marginal social benefit of the last unit produced compare to its marginal social cost?
What will be an ideal response?
When less than the efficient amount of a good is produced, the marginal social benefit of the last unit produced exceeds its marginal social cost. The fact that the marginal social benefit exceeds the marginal social cost indicates that producing additional units of the good will move the amount of production closer to the efficient quantity.
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A government-inhibited good is a good which
A) is not subject to the principle of mutual exclusivity. B) the political process has deemed socially undesirable. C) can be consumed by one individual without affecting the consumption of another individual. D) the political process has deemed socially desirable.
Which of these curves is the competitive firm's short-run supply curve?
a. the average variable cost curve above marginal cost b. the average total cost curve above marginal cost c. the marginal cost curve above average variable cost d. the average fixed cost curve