Resources are distributed in a way that maximizes the overall satisfaction of consumers when production occurs at the point at which:
A)marginal cost intersects average variable cost
B)the price that consumers are willing to pay is equal to average revenue
C)the price that consumers are willing to pay is equal to marginal cost
D)the price that consumers are willing to pay is equal to average variable cost
E)price is equal to total revenue

Question

Quizplus · Accepted Answer

At the point where the price that consumers are willing to pay is equal to marginal cost, resources are being used efficiently and production is maximizing overall satisfaction of consumers. This is because the marginal cost represents the cost of producing one more unit of the good or service, and if the price that consumers are willing to pay is equal to this cost, then the producer is not overproducing and is only producing what consumers want at the most efficient cost.

Resources Are Distributed in a Way That Maximizes the Overall