If the marginal benefit of consuming another unit of a good is positive, then to reach the allocatively efficient level of output more of the good should be produced and consumed
A) no matter what.
B) as long as the consumer can afford to pay for it.
C) if the total benefit of the good is greater than its total cost.
D) if the marginal benefit of the good is greater than its marginal cost.

Question

Quizplus · Accepted Answer

Allocative efficiency is achieved when the marginal benefit of consuming a good equals its marginal cost. If the marginal benefit is greater than the marginal cost, producing and consuming more of the good moves the economy towards allocative efficiency.

If the Marginal Benefit of Consuming Another Unit of a Good