When there is overproduction of a good,
A)the marginal benefit of the good exceeds its marginal cost.
B)the marginal cost of the good exceeds its marginal benefit.
C)the net benefit of producing extra units of the good is positive.
D)allocative efficiency is enhanced.

Question

Quizplus · Accepted Answer

When there is overproduction of a good, the marginal cost of producing an additional unit exceeds the marginal benefit derived from that unit, indicating resources are not being used efficiently.

When There Is Overproduction of a Good