The socially efficient level of production occurs where the marginal-cost curve intersects which of the following curves
A)average variable cost
B)average total cost
C)demand
D)marginal revenue

Question

Quizplus · Accepted Answer

The socially efficient level of production occurs where the marginal-cost (MC) curve intersects the demand (D) curve. This is because the socially efficient level of production is where the marginal cost of producing an additional unit of output is equal to the marginal benefit (the price the consumers are willing to pay) they receive from consuming that additional unit of output. At this level of production, resources are allocated efficiently and society maximizes its overall welfare. The intersection of the MC and D curves signifies that the marginal benefit of producing an additional unit of output (D) is equal to its marginal cost (MC), hence the socially efficient level of production is achieved.

The Socially Efficient Level of Production Occurs Where the Marginal-Cost