Suppose that at current production levels, marginal social benefit is $75 while marginal cost is $80. We know that:

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Quizplus · Accepted Answer

At the current production level, marginal cost exceeds marginal benefit, implying inefficiency. Therefore, to achieve efficiency, the level of output needs to be reduced. In this case, decreasing production could lead to a decrease in costs and an increase in overall economic efficiency.

Suppose That at Current Production Levels, Marginal Social Benefit Is