Figure 7-11. On the graph below, Q represents the quantity of the good and P represents the good's price.

-Refer to Figure 7-11.If four units of the good are produced and sold,then
A)the cost to sellers exceeds the value to buyers.
B)producer surplus is maximized.
C)total surplus is minimized.
D)the allocation of resources is inefficient.

Question

Figure 7-11. On the graph below, Q represents the quantity of the good and P represents the good's price.
 
-Refer to Figure 7-11.If four units of the good are produced and sold,then
A)the cost to sellers exceeds the value to buyers. 
B)producer surplus is maximized. 
C)total surplus is minimized. 
D)the allocation of resources is inefficient.

Quizplus · Accepted Answer

The allocation of resources is inefficient when the cost to sellers exceeds the value to buyers.