Table 17-11
Only two firms, ABC and XYZ, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost.
-Refer to Table 17-11. What is the socially efficient quantity of the product?
A)25
B)35
C)50
D)70

Question

Table 17-11
Only two firms, ABC and XYZ, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost. 
-Refer to Table 17-11. What is the socially efficient quantity of the product?
A)25 
B)35 
C)50 
D)70

Quizplus · Accepted Answer

The socially efficient quantity is the point where the marginal cost curve intersects the demand curve. In this case, both firms have the same constant marginal cost of $8, so the socially efficient quantity is where the demand curve intersects the line Y = $8. This occurs at a quantity of 50 units, which is option C.

Table 17-11 Only Two Firms, ABC and XYZ, Sell a Particular Product