At the current level of output, the marginal social cost of tennis balls is greater than the marginal social benefit. Then
A) more than the efficient quantity of tennis balls is being produced.
B) there is excess demand for tennis balls.
C) firms producing tennis balls must be earning negative profit.
D) too few tennis balls are being produced.

Question

Quizplus · Accepted Answer

When the marginal social cost exceeds the marginal social benefit, it indicates that the current level of production is above the efficient quantity, leading to overproduction.

At the Current Level of Output, the Marginal Social Cost