Use the following to answer question:
Figure: Market Failure
-(Figure: Market Failure)Use Figure: Market Failure.In the figure,if production in this competitive market is at quantity G:
A)marginal benefit is less than marginal cost.
B)marginal benefit is equal to marginal cost.
C)marginal benefit is greater than marginal cost.
D)price is equal to marginal cost and less than marginal benefit.

Question

Use the following to answer question:
Figure: Market Failure 
-(Figure: Market Failure)Use Figure: Market Failure.In the figure,if production in this competitive market is at quantity G:
A)marginal benefit is less than marginal cost. 
B)marginal benefit is equal to marginal cost. 
C)marginal benefit is greater than marginal cost. 
D)price is equal to marginal cost and less than marginal benefit.

Quizplus · Accepted Answer

Marginal benefit is less than marginal cost at quantity G, as the demand curve (MB) is below the supply curve (MC) at that point.

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