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Question
When _______, there will be allocative efficiency meaning thereby that the cost of the last unit is exactly equal to the price consumers are willing to pay for it and so that right goods are being sold to the people at the right price.
When _______, there will be allocative efficiency meaning thereby that the cost of the last unit is exactly equal to the price consumers are willing to pay for it and so that right goods are being sold to the people at the right price.
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Solution
The correct option is C MC = AR
When marginal cost is equal to the average revenue, then it means that the cost of the last unit of production is exactly equal to the price which consumers are willing to pay for it. There for the products are sold at the right price.
When marginal cost is equal to the average revenue, then it means that the cost of the last unit of production is exactly equal to the price which consumers are willing to pay for it.
There for the products are sold at the right price.
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