If,in a competitive market,marginal benefit is greater than marginal cost
A)the net benefit to consumers from participating in the market is greater than the net benefit to producers.
B)the government must force producers to lower price in order to achieve economic efficiency.
C)the quantity sold is greater than the equilibrium quantity.
D)the quantity sold is less than the equilibrium quantity.

Question

Quizplus · Accepted Answer

In a competitive market, if the marginal benefit is greater than the marginal cost, it indicates that the quantity sold is less than the equilibrium quantity. This is because, at equilibrium, marginal benefit equals marginal cost, and any quantity less than this equilibrium point means that there are still transactions that could occur where the benefit to consumers exceeds the cost of production, suggesting that not enough of the good is being produced and sold to maximize total welfare.

If,in a Competitive Market,marginal Benefit Is Greater Than Marginal Cost