Table 17-7
The information in the table below shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per year) and that the marginal cost of providing an additional subscription is always $16.
-Refer to Table 17-7. The socially efficient level of output supplied to this market is
A)4,000
B)5,000
C)6,000
D)8,000

Question

Table 17-7
The information in the table below shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per year) and that the marginal cost of providing an additional subscription is always $16. 
-Refer to Table 17-7. The socially efficient level of output supplied to this market is
A)4,000 
B)5,000 
C)6,000 
D)8,000

Quizplus · Accepted Answer

The socially efficient level of output is where the marginal social cost equals the marginal social benefit. Without the table, we assume that 6,000 is the level where these two are equal, based on typical economic principles.

Table 17-7 The Information in the Table Below Shows the Total Demand