Efficient production occurs when:
A)the marginal cost curve is downward sloping.
B)a given level of output is produced at the lowest possible cost.
C)output is minimized and cost is falling.
D)a given level of cost is able to produce a higher output level than before.

Question

Quizplus · Accepted Answer

Efficient production occurs when a given level of output is produced at the lowest possible cost, which is represented by the point of minimum average total cost on the curve. Marginal cost may be downward sloping but it is not a sufficient condition for efficient production as it only represents the cost of producing one additional unit of output. Output minimization and falling costs are not indicators of efficient production.

Efficient Production Occurs When