Resources are efficiently allocated when production occurs at that output at which
A)P equals MR.
B)P equals AVC.
C)P exceeds MR.
D)P equals MC.

Question

Quizplus · Accepted Answer

Resources are efficiently allocated when the price (P) equals the marginal cost (MC) of production. This condition ensures that the value consumers place on a good is equal to the cost of producing an additional unit, leading to an optimal allocation of resources.

Resources Are Efficiently Allocated When Production Occurs at That Output