If the marginal benefit of consuming another unit of a good is positive, then to reach the allocatively efficient level of output more of the good should be consumed
A) if the total benefit is greater than the total cost.
B) no matter what..
C) if the marginal benefit is greater than the marginal cost.
D) as long as the consumer can afford to pay for it.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when the marginal benefit (MB) of consuming a good equals the marginal cost (MC) of producing it. If the marginal benefit of consuming another unit of a good is positive, it means that the consumer values the good more than the cost of producing it. Therefore, consuming more of the good would lead to a higher total benefit as long as the marginal benefit is greater than the marginal cost. Therefore, to reach the allocatively efficient level of output, more of the good should be consumed as long as MB > MC.

If the Marginal Benefit of Consuming Another Unit of a Good