Overproduction compared to the efficient amount implies that for the last unit produced,
A) the deadweight loss is zero.
B) marginal social benefit equals marginal social cost.
C) marginal social benefit exceeds marginal social cost.
D) marginal social cost exceeds marginal social benefit.

Question

Quizplus · Accepted Answer

Overproduction compared to the efficient amount implies that the cost of producing the last unit (marginal social cost) is higher than the benefit derived from its consumption (marginal social benefit), leading to inefficiency and a deadweight loss.

Overproduction Compared to the Efficient Amount Implies That for the Last