If the price of product Y is $25 and its marginal cost is $18,
A) Y is being produced with the least-cost combination of resources.
B) society will realize a net gain if less of Y is produced.
C) resources are being underallocated to Y.
D) resources are being overallocated to Y.

Question

Quizplus · Accepted Answer

When the price of a product is higher than its marginal cost, it indicates that resources are being underallocated to that product, as producing more would increase overall welfare.

If the Price of Product Y Is $25 and Its