Asked by Mannat Rattan on Jul 25, 2024
Verified
Assuming no externalities exist, if a good's price is more than its marginal cost, then the benefits consumers derive are ________ than the cost of resources needed to produce it and ________ should be produced.
A) greater; less
B) greater; more
C) less; less
D) less; more
Marginal Cost
The additional cost incurred by producing one more unit of a product or service, an important concept for decision-making in economics.
Externalities
Unintended financial outcomes affecting individuals not directly engaged, potentially leading to good or bad impacts.
- Assess how state interventions, including the imposition of taxes and the offering of subsidies, tackle externalities.
Verified Answer
NO
Nayeli OrtizJul 26, 2024
Final Answer :
B
Explanation :
When the price of a good is higher than its marginal cost, it indicates that consumers value the good more than it costs to produce additional units, suggesting that increasing production would enhance overall economic welfare.
Learning Objectives
- Assess how state interventions, including the imposition of taxes and the offering of subsidies, tackle externalities.
Related questions
If a Profit-Maximizing Competitive Firm ________ Compensate Society for a ...
Governments Often ________ Activities That Generate External ________ ...
If the Government Wishes to Encourage Firms to Internalize Externalities ...
Taxes Can Be Used to Internalize Negative Externalities
Should Government Subsidize Corporate Relocations