If the marginal cost of producing steel exceeds the marginal utility of using steel, then for economic efficiency,
A)the price of steel should fall.
B)society should produce less steel.
C)the price of goods made with steel should fall.
D)society should direct resources toward steel production and away from the production of other goods.

Question

Quizplus · Accepted Answer

If the marginal cost of producing steel exceeds the marginal utility of using steel, it means that society is investing more resources (money, labor, etc.) in producing steel than the benefits gained from using it in goods and services. This leads to economic inefficiency. The best choice, in this case, is to produce less steel and direct resources toward more beneficial production. This reduces wasteful investment in steel production and helps to achieve economic efficiency. The other options do not address the issue of economic inefficiency caused by overinvestment in steel production.

If the Marginal Cost of Producing Steel Exceeds the Marginal