Resources are efficiently allocated when production occurs where:

A) marginal cost equals average variable cost.
B) price is equal to average revenue.
C) price is equal to marginal cost.
D) price is equal to average variable cost.

Question

Rakesh Srivastava · Accepted Answer

Final Answer : C, Explanation :  Production occurs where price is equal to marginal cost because at this point, the benefit (price) of producing one more unit equals the cost (marginal cost) of producing one more unit. This results in a situation where resources are being efficiently allocated because the cost of production is not exceeding the benefit to society.

Resources are efficiently allocated when production occurs where:

A) marginal cost equals average variable cost.
B) price is equal to average revenue.
C) price is equal to marginal cost.
D) price is equal to average variable cost.

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Learning Objectives

Related questions

Resources are efficiently allocated when production occurs where:A) marginal cost equals average variable cost.B) price is equal to average revenue.C) price is equal to marginal cost.D) price is equal to average variable cost.

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Learning Objectives

Learning Objectives

Related questions

Resources are efficiently allocated when production occurs where:

A) marginal cost equals average variable cost.
B) price is equal to average revenue.
C) price is equal to marginal cost.
D) price is equal to average variable cost.