According to Oskar Lange's model socialist enterprises should produce where ?
Correct answer: B. Product price equals marginal cost
- A. The monopoly profit maximization rule applies
- B. Product price equals marginal cost
- C. marginal revenue equals average cost
- D. total revenue equals total cost
Explanation
In Lange's socialist model, enterprises use the efficiency rule of producing where price equals marginal cost, ensuring that the value of the last unit equals its resource cost. Profit maximisation is not the defining objective of these socially owned firms.
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