Figure 7-22
-Refer to Figure 7-22.If 110 units of the good are bought and sold,then
A)the marginal cost to sellers is equal to the marginal value to buyers.
B)the marginal value to buyers is greater than the marginal cost to sellers.
C)the marginal cost to buyers is greater than marginal value to sellers.
D)producer surplus is greater than consumer surplus.

Question

Figure 7-22 
-Refer to Figure 7-22.If 110 units of the good are bought and sold,then
A)the marginal cost to sellers is equal to the marginal value to buyers. 
B)the marginal value to buyers is greater than the marginal cost to sellers. 
C)the marginal cost to buyers is greater than marginal value to sellers. 
D)producer surplus is greater than consumer surplus.

Quizplus · Accepted Answer

At 110 units, the marginal cost to sellers is $7 per unit and the marginal value to buyers is $8 per unit. Therefore, the marginal value to buyers is greater than the marginal cost to sellers, indicating that there is a net benefit to society (consumer surplus exceeds producer surplus) if one more unit is produced and sold. Choice B accurately reflects this situation.

Figure 7-22 -Refer to Figure 7-22.If 110 Units of the Good Are