-In the above table, the efficient level of output can be achieved through a per unit
A) subsidy of $20.
B) tax of $60.
C) subsidy of $60.
D) tax of $20.

Question

-In the above table, the efficient level of output can be achieved through a per unit
A) subsidy of $20. 
B) tax of $60. 
C) subsidy of $60. 
D) tax of $20.

Quizplus · Accepted Answer

The efficient level of output is where marginal cost equals marginal benefit. In this case, marginal cost is $40 and marginal benefit is $80. Therefore, a subsidy of $20 per unit would be necessary to achieve the efficient level of output.

-In the Above Table, the Efficient Level of Output Can