Figure 10-19
-Refer to Figure 10-19. The socially optimal quantity of output is
A)58 units.
B)73 units.
C)between 73 and 94 units.
D)94 units.

Question

Figure 10-19 
-Refer to Figure 10-19. The socially optimal quantity of output is
A)58 units. 
B)73 units. 
C)between 73 and 94 units. 
D)94 units.

Quizplus · Accepted Answer

The socially optimal quantity of output is where the marginal social benefit (MSB) equals the marginal social cost (MSC), which is at the intersection of the MSB and MSC curves. This occurs at output level Qs = 73 units, which is where the vertical distance between the two curves is smallest. Any output level above or below Qs will result in a deadweight loss to society.

Figure 10-19 -Refer to Figure 10-19. the Socially Optimal Quantity of Output