Use the figure below to answer the following questions.

Figure 16.3.1
-Refer to Figure 16.3.1.The figure shows the marginal private benefit curve,the marginal social benefit curve,and the market supply curve.If production is left to the private market,then
A)the quantity produced is less than the efficient quantity.
B)the quantity produced is greater than the efficient quantity.
C)price is greater than marginal social benefit quantity.
D)the marginal cost curve is horizontal.
E)none of the above.

Question

Use the figure below to answer the following questions.
  
Figure 16.3.1
-Refer to Figure 16.3.1.The figure shows the marginal private benefit curve,the marginal social benefit curve,and the market supply curve.If production is left to the private market,then
A)the quantity produced is less than the efficient quantity. 
B)the quantity produced is greater than the efficient quantity. 
C)price is greater than marginal social benefit quantity. 
D)the marginal cost curve is horizontal. 
E)none of the above.

Quizplus · Accepted Answer

The quantity produced by the private market is where the market supply curve intersects the marginal private benefit curve. This is less than the efficient quantity where the marginal social benefit curve intersects the marginal cost curve. Therefore, the private market produces less than the efficient quantity.

Use the Figure Below to Answer the Following Questions