Suppose MRTS is not the same across all producers. In this case, the economic outcome is not fully efficient because:
A) exchange is inefficient.
B) the use of inputs in production is inefficient.
C) the mix of outputs in inefficient.
D) none of the above

Question

Quizplus · Accepted Answer

If MRTS (marginal rate of technical substitution) is not the same across all producers, then some producers are using inputs in a less efficient way than others. This means that the use of inputs in production is inefficient, which can lead to higher costs for these producers and potential deadweight loss for the economy as a whole.

Suppose MRTS Is Not the Same Across All Producers