A Firm Is Producing an Output Such That the Benefit

Multiple Choice

A firm is producing an output such that the benefit from one more unit is more than the cost of producing that additional unit. This means the firm is

A) producing more output than allocative efficiency requires.
B) producing less output than allocative efficiency requires.
C) achieving productive efficiency.
D) producing an inefficient output, but we cannot say whether output should be increased or decreased.