Bib's Soccer Ball Company produces 800 soccer balls per week.If the firm used marginal cost pricing to determine soccer ball output, it would produce 600 soccer balls.Consumers do not receive the most desirable quantity of soccer balls from Bib's because

Question

Quizplus · Accepted Answer

Marginal cost pricing is based on the idea that the price of a product should be set equal to its marginal cost. Therefore, if Bib's Soccer Ball Company produced only 600 soccer balls under marginal cost pricing, it means that the cost of producing the additional 200 soccer balls would be greater than the price that consumers are willing to pay for those extra soccer balls. As a result, producing those additional soccer balls would not be profitable, and Bib's would not supply them to the market. This means that consumers would not receive the most desirable quantity of soccer balls, but this is due to economic reasons related to costs and revenues, rather than any other factors such as economic losses or abnormal profits.

Bib's Soccer Ball Company Produces 800 Soccer Balls Per Week