AP® Microeconomics

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Product Innovation and Inefficiency

APMICR-KYDDCL

Product innovation will be allocatively inefficient if

A

the marginal benefit to consumers of having a new product available exceeds the marginal cost to the firm of introducing that product.

B

the marginal benefit to the firm of introducing a new product exceeds the marginal cost to the firm of doing so.

C

the marginal benefit to consumers of having a new product available exceeds the marginal cost to the society of introducing that product.

D

the marginal cost to the firm of introducing a new product exceeds the marginal benefit to the firm of doing so.

E

the marginal benefit to the firm of introducing a new product exceeds the marginal benefit to consumers of having a new product available.