Figure 10-11
-Refer to Figure 10-11. "The social value of the last unit produced exceeds the private cost of the last unit produced by $13.50." This statement is correct at which quantity of output?
A)210 units
B)270 units
C)330 units
D)390 units

Question

Figure 10-11 
-Refer to Figure 10-11. "The social value of the last unit produced exceeds the private cost of the last unit produced by $13.50." This statement is correct at which quantity of output?
A)210 units 
B)270 units 
C)330 units 
D)390 units

Quizplus · Accepted Answer

At 330 units, the marginal social benefit (MSB) intersects with the marginal private cost (MPC) curve, indicating that at this level of output, the social value of the last unit produced exceeds the private cost of the last unit produced by $13.50. At any lower level of output, the MSB is below the MPC, indicating that society would benefit from a greater level of production, while at any higher level of output, the MSB is above the MPC, indicating that society would benefit from a lower level of production.

Figure 10-11 -Refer to Figure 10-11. "The Social Value of the Last