If the output of product X is such that marginal benefit equals marginal cost,
A) the correct amount of resources is being allocated to X's production.
B) the value of producing X exceeds the value of producing alternative products with the available resources.
C) there can be a net gain to society by allocating either more or less resources to producing X.
D) resources are overallocated to the production of X.

Question

Quizplus · Accepted Answer

When the marginal benefit equals the marginal cost of a product, it means that the resources are being used effectively and efficiently to produce that product. Therefore, there is no need to allocate more or less resources to producing the product. A net gain to society is also possible when the marginal benefit equals marginal cost. Hence, option A is the correct answer.

If the Output of Product X Is Such That Marginal