If the marginal benefit received from a good is less than the marginal cost of production, then:
A) society's well-being can be improved if production increases.
B) society's well-being can be improved if production decreases.
C) society's well-being cannot be improved by changing production.
D) the market is producing too little of the good.

Question

Quizplus · Accepted Answer

When the marginal benefit is less than the marginal cost of production, it means that producing more of the good would create a net loss and decrease society's well-being. Therefore, society's well-being can be improved by reducing production, making choice B the correct answer.

If the Marginal Benefit Received from a Good Is Less