If someone produced too little of a good, this would suggest that
A) rational choice cannot be applied to many economic decisions.
B) the good was produced past the point where its marginal cost exceeded its marginal benefit.
C) government should intervene to produce more of the good.
D) the good was produced to the point where its marginal benefit exceeded its marginal cost.

Question

Quizplus · Accepted Answer

If someone produced too little of a good, it would suggest that the cost of producing one more unit of the good (marginal cost) was lower than the additional benefit gained from producing one more unit (marginal benefit). Therefore, the good was produced to the point where its marginal benefit exceeded its marginal cost. This could result in a shortage of the good in the market, which could potentially drive up prices and incentivize producers to increase their supply.

If Someone Produced Too Little of a Good, This Would