Table 17-9
The table shows the demand schedule for a particular product.
-Refer to Table 17-9. If the marginal cost of production in this market is $4, what is the socially efficient quantity of output?
A)3 units
B)4 units
C)5 units
D)6 units

Question

Table 17-9
The table shows the demand schedule for a particular product. 
-Refer to Table 17-9. If the marginal cost of production in this market is $4, what is the socially efficient quantity of output?
A)3 units 
B)4 units 
C)5 units 
D)6 units

Quizplus · Accepted Answer

The socially efficient quantity of output is where the marginal cost equals the marginal benefit (or price). If the marginal cost is $4, we need to find the quantity where the price is also $4. Assuming the table shows the price at different quantities, the socially efficient quantity is where the price equals $4, which is at 6 units.

Table 17-9 The Table Shows the Demand Schedule for a Particular Product