Economics (AS & A Level) · Oct / Nov 2024 · Paper 33 · Question 3
9708Efficiency and market failure
A firm increases its production. When will this result in allocative efficiency?
- Awhen the cost of producing the last extra unit equals the value the consumers place on it
- Bwhen the cost of producing the last extra unit is at a minimum
- Cwhen the total cost of production equals the value that consumers place on the total product
- Dwhen the total revenue reaches a maximum
As printed in the paper
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Correct answer: A. when the cost of producing the last extra unit equals the value the consumers place on it
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