Exhibit 9-11 In Exhibit 9-11, the level of output that would achieve allocative efficiency is
A)700 units
B)810 units
C)884 units
D)976 units
E)1, 000 units

Question

Exhibit 9-11  In Exhibit 9-11, the level of output that would achieve allocative efficiency is
A)700 units 
B)810 units 
C)884 units 
D)976 units 
E)1, 000 units

Quizplus · Accepted Answer

Allocative efficiency is achieved when marginal benefit equals marginal cost. In Exhibit 9-11, this occurs at an output level of 884 units where the marginal benefit curve intersects the marginal cost curve. Therefore, the best choice is C.

Exhibit 9-11 in Exhibit 9-11, the Level of Output