In the absence of externalities, the optimal distribution of resources occurs whenproduction is at
A) P = MC
B) P = ATC
C) TR = TC
D) MR = MC
E) P = AFC

Question

Quizplus · Accepted Answer

The optimal distribution of resources in a competitive market occurs when price equals marginal cost (P = MC), as this ensures that resources are allocated efficiently and consumer and producer surplus are maximized.

In the Absence of Externalities, the Optimal Distribution of Resources