Use the figure below to answer the following questions.

Figure 2.2.1
-In Figure 2.2.1, when 2,000 bicycles are produced each month,
A)the marginal benefit from another bicycle is greater than the marginal cost of another bicycle.
B)more bicycles must be produced to reach the efficient level of output.
C)fewer bicycles must be produced to reach the efficient level of output.
D)the economy is efficient at this level of production of bicycles.
E)both A and B.

Question

Use the figure below to answer the following questions.
  
Figure 2.2.1
-In Figure 2.2.1, when 2,000 bicycles are produced each month,
A)the marginal benefit from another bicycle is greater than the marginal cost of another bicycle. 
B)more bicycles must be produced to reach the efficient level of output. 
C)fewer bicycles must be produced to reach the efficient level of output. 
D)the economy is efficient at this level of production of bicycles. 
E)both A and B.

Quizplus · Accepted Answer

When the marginal benefit is greater than the marginal cost, it indicates that producing more bicycles would increase overall welfare, suggesting that more bicycles should be produced to reach the efficient level of output.

Use the Figure Below to Answer the Following Questions