If the marginal benefit of a good is less than its marginal cost, then the nation should
A) produce more of that good.
B) Maintain the current level of production of that good.
C) reduce the marginal benefit of that good.
D) reduce the production of that good.

Question

Quizplus · Accepted Answer

If the marginal benefit of a good is less than its marginal cost, it means that the cost of producing one more unit of the good is greater than the additional benefit gained from producing it. This indicates that the nation is producing more than what is efficient and there is a misallocation of resources. Therefore, the best choice would be to reduce the production of that good.

If the Marginal Benefit of a Good Is Less Than