Suppose that currently 50 million hamburgers are being produced and sold at a price of $5.00. This outcome in the market for hamburgers is economically inefficient because:
Question:
Suppose that currently 50 million hamburgers are being produced and sold at a price of $5.00. This outcome in the market for hamburgers is economically inefficient because:
Choices:
- Some hamburgers produced incur opportunity costs of production that exceed their value or marginal benefit to consumers.
- Some hamburgers that are valued more highly by consumers than their opportunity cost of production are not being produced and sold.
- The opportunity cost of producing the last hamburger equals the marginal benefit of consumption.
Answer:
Some hamburgers that are valued more highly by consumers than their opportunity cost of production are not being produced and sold.