Which characteristic of competitive markets permits society to answer the WHAT to produce question efficiently?
A)Marginal cost pricing.
B)Average cost pricing.
C)Minimum cost pricing.
D)Total cost pricing.

Question

Quizplus · Accepted Answer

Marginal cost pricing allows firms to produce goods up until the point where the marginal cost is equal to the market price. This means that firms are producing the goods that society values the most while minimizing the cost of production. As a result, society is able to allocate resources efficiently and answer the "what to produce" question.

Which Characteristic of Competitive Markets Permits Society to Answer the WHAT