When the marginal benefit of an output exceeds the marginal cost,

A) production of that output should be increased, in order to achieve efficiency.
B) production of that output should be decreased, in order to achieve efficiency.
C) increasing the production of that output would increase the deadweight loss.
D) reducing the production of that output would reduce efficiency losses.

Question

Elona Shehu · Accepted Answer

Final Answer : A, Explanation :  When the marginal benefit of producing an additional unit of output exceeds the marginal cost of producing that unit, increasing production will move the economy closer to an efficient allocation of resources, where marginal benefit equals marginal cost.

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