When market forces lead to efficient production, each producer is _____, and the product is produced _____.
A)acting in self-interest; at the lowest possible marginal cost
B)coordinating with others; at a cost equal to price
C)alternating production; at minimum cost
D)maximizing production; at maximum marginal cost

Question

Quizplus · Accepted Answer

Market forces lead to producers acting in their self-interest in order to maximize profits, which naturally leads to production at the lowest possible marginal cost. This is because producers will only produce goods if the revenue they receive from selling the goods exceeds the cost of producing them. To maximize profit, producers will produce goods where the marginal cost equals the market price, which is the lowest possible cost at which they can produce the good.

When Market Forces Lead to Efficient Production, Each Producer Is