If a benevolent social planner chooses to produce more than the equilibrium quantity of a good, then
A) the value placed on the last unit of production by buyers exceeds the cost of production.
B) the cost of production on the last unit produced exceeds the value placed on it by buyers.
C) consumer surplus is maximized.
D) total surplus is maximized.
E) producer surplus is maximized.

Question

Quizplus · Accepted Answer

Producing more than the equilibrium quantity means that the cost of producing the last unit exceeds the value that buyers place on it, leading to inefficiency and a reduction in total surplus.

If a Benevolent Social Planner Chooses to Produce More Than