If the difference between the marginal benefit and the marginal cost of a good is as large as possible,
A) resources are being used with maximum efficiency.
B) resources would create more value producing other goods and hence the production of this good should be decreased.
C) more of the good should be produced.
D) allocative efficiency has been attained.
E) Both answers A and D are correct.

Question

Quizplus · Accepted Answer

When the difference between marginal benefit and marginal cost is large, it indicates that producing more of the good will increase overall benefit, suggesting that more of the good should be produced to move towards allocative efficiency.

If the Difference Between the Marginal Benefit and the Marginal