Point B in the figure below is:
A) efficient since it produces 20 units of output at the lowest possible cost.
B) efficient since it produces 10 units of output at the lowest possible cost.
C) inefficient since it produces 20 units of output at a cost greater than the minimum cost.
D) inefficient since it produces 10 units of output at a cost greater than the minimum cost.

Question

Point B in the figure below is: 
A) efficient since it produces 20 units of output at the lowest possible cost. 
B) efficient since it produces 10 units of output at the lowest possible cost. 
C) inefficient since it produces 20 units of output at a cost greater than the minimum cost. 
D) inefficient since it produces 10 units of output at a cost greater than the minimum cost.

Quizplus · Accepted Answer

Point B represents the lowest possible cost to produce 10 units of output. Any point above or to the left of point B would have a higher cost of production for 10 units of output, and any point below or to the right of point B would have a lower output level for the same cost. Therefore, point B is efficient.

Point B in the Figure Below Is