If the marginal benefit received from a good is less than the marginal social cost of production, then:
A)society's well-being can be improved if production increases.
B)society's well-being can be improved if production decreases.
C)society's well-being cannot be improved by changing production.
D)the market is producing too little of the good.

Question

Quizplus · Accepted Answer

When the marginal benefit received from a good is less than the marginal social cost of production, it means that society is not receiving as much value from the good as it is costing to produce it. This leads to a situation where society's well-being can be improved by decreasing production of the good. If production were to increase, it would only worsen the situation by creating more cost than benefit. Therefore, the best choice is B.

If the Marginal Benefit Received from a Good Is Less