In order to maximize social welfare,a firm's production of a good should occur at the output where

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Maximizing social welfare means producing the quantity of a good where the social marginal benefit (SMB) is equal to the social marginal cost (SMC). At this point, the value of the last unit produced is exactly equal to the cost incurred in producing that unit, which ensures that resources are being allocated efficiently and the maximum overall benefit is being realized. Choices B and C refer to maximizing the firm's profit, which may not align with maximizing social welfare.

In Order to Maximize Social Welfare,a Firm's Production of a Good