Economic efficiency simply requires that all commodities be produced at minimum marginal cost.

Question

Quizplus · Accepted Answer

Economic efficiency requires that all commodities be produced at the minimum total cost, not just marginal cost. This is because total cost takes into account both fixed and variable costs, whereas marginal cost only considers the additional cost of producing one more unit. Producing at minimum marginal cost may not be the most efficient way to operate if fixed costs are not fully accounted for.

Economic Efficiency Simply Requires That All Commodities Be Produced at Minimum