A production quota is set equal to the equilibrium quantity.At the quota quantity,marginal social benefit is ________ marginal social cost and the level of production is ________.
A)greater than;efficient
B)greater than;inefficient
C)less than;efficient
D)less than;inefficient
E)equal to;efficient

Question

Quizplus · Accepted Answer

When a production quota is set equal to the equilibrium quantity, marginal social benefit equals marginal social cost, indicating an efficient level of production. This is because, at equilibrium, the quantity supplied equals the quantity demanded, reflecting the most efficient allocation of resources.

A Production Quota Is Set Equal to the Equilibrium Quantity