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 means producing the quantity where marginal cost equals market price. In this case, the market price is likely lower than the cost of producing the additional 200 soccer balls, otherwise, the firm would produce them. Therefore, consumers do not receive the most desirable quantity of soccer balls because the cost of producing the additional 200 soccer balls is greater than the amount that consumers are willing to pay for them.

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