Economic Efficiency can be attained when
A)marginal benefit is greater than marginal cost.
B)marginal benefit is less than marginal cost.
C)marginal benefit equals marginal cost.
D)marginal cost is zero.

Question

Quizplus · Accepted Answer

Economic efficiency is achieved when the marginal benefit equates to marginal cost. This means that the additional benefit gained from producing or consuming one more unit of a good or service is equal to the additional cost incurred. Thus, there is no better or worse choice beyond this point, and the economy has achieved maximum possible productivity. If marginal benefit is greater than marginal cost, then it would still be efficient to produce more, whereas, if marginal benefit is less than marginal cost, it would make sense to decrease production. However, a state of equilibrium is achieved when marginal benefit equals marginal cost.

Economic Efficiency Can Be Attained When