If the marginal benefit of a good exceeds its marginal cost
A) we've achieved efficient resource use.
B) we should produce more to achieve the allocatively efficient use of resources.
C) we should produce less to achieve the allocatively efficient use of resources.
D) we cannot tell if more or less should be produced to achieve the allocatively efficient use of resources.

Question

Quizplus · Accepted Answer

When the marginal benefit of a good exceeds its marginal cost, producing more of the good moves the economy towards allocative efficiency, where the marginal benefit equals the marginal cost.

If the Marginal Benefit of a Good Exceeds Its Marginal