Assuming there are no externalities, if a firm produces an output level where the benefits to consumers the cost to suppliers to produce it, then price is marginal cost.

A) are less than; greater than
B) exceed; greater than
C) exceed; less than
D) equal; less than

Question

Assuming there are no externalities, if a firm produces an output level where the benefits to consumers ________ the cost to suppliers to produce it, then price is ________ marginal cost.

A) are less than; greater than
B) exceed; greater than
C) exceed; less than
D) equal; less than

Michael Ubriaco · Accepted Answer

Final Answer : B, Explanation :  When the benefits to consumers exceed the cost to suppliers to produce it, it implies that the price consumers are willing to pay is higher than the cost of production, hence price is greater than marginal cost.

Assuming there are no externalities, if a firm produces an output level where the benefits to consumers the cost to suppliers to produce it, then price is marginal cost.

A) are less than; greater than
B) exceed; greater than
C) exceed; less than
D) equal; less than

Definitions

Learning Objectives

Learning Objectives

Related questions

Assuming there are no externalities, if a firm produces an output level where the benefits to consumers ________ the cost to suppliers to produce it, then price is ________ marginal cost.A) are less than; greater thanB) exceed; greater thanC) exceed; less thanD) equal; less than

Definitions

Learning Objectives

Learning Objectives

Related questions

Assuming there are no externalities, if a firm produces an output level where the benefits to consumers the cost to suppliers to produce it, then price is marginal cost.

A) are less than; greater than
B) exceed; greater than
C) exceed; less than
D) equal; less than