Which of the following conditions could lead to an inefficient quantity of pretzels being produced?
A) the existence of many producers of pretzels
B) the existence of many consumers of pretzels
C) the existence of a single producer and seller of pretzels
D) All of the above conditions could cause the actual quantity of pretzels to be an inefficient quantity.
Question 2
In the above figure, when 2000 bicycles are produced each month, we can see that
A) the marginal benefit from another bicycle is greater than the marginal cost of another bicycle.
B) more bicycles should be produced to reach the allocatively efficient level of output.
C) the economy is very efficient at the production of bicycles because the marginal benefit exceeds the marginal cost.
D) Both answers A and B are correct.
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