When the efficient quantity of output is produced,
A) the sum of consumer surplus and producer surplus is maximised.
B) the marginal social benefit of the last unit produced is equal to the marginal social cost of the last unit produced.
C) resources are used in the activities in which they are most highly valued.
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

All of the options describe conditions or outcomes associated with the production of the efficient quantity of output. A) reflects the maximization of total welfare, B) indicates the point where the additional cost of producing one more unit equals the additional benefit derived from it, and C) implies optimal allocation of resources for maximum value.

When the Efficient Quantity of Output Is Produced