(Figure: Understanding Surplus and Efficiency) In the graph, what is the efficient level of output?

Question

Quizplus · Accepted Answer

The efficient level of output is where the marginal benefit (MB) equals the marginal cost (MC), which is at an output level of 10 units. At this level, there is no deadweight loss and producer surplus plus consumer surplus is maximized. Any output level below or above 10 units will result in deadweight loss and less overall surplus. Therefore, the best choice is output level C.

(Figure: Understanding Surplus and Efficiency) in the Graph, What Is