Use the following diagram to answer the following questions.

-Refer to Diagram 4-1. The efficient level of compact discs is given by quantity:

Question

Use the following diagram to answer the following questions.
 
-Refer to Diagram 4-1. The efficient level of compact discs is given by quantity:

Quizplus · Accepted Answer

The efficient level of production is where the marginal cost (MC) equals the marginal benefit (MB). In Diagram 4-1, this occurs at Q₂, where the MC curve intersects the demand curve. Producing any other quantity would result in either higher MC than MB (to the left of Q₂) or higher MB than MC (to the right of Q₂), meaning it would be less efficient. Therefore, Q₂ is the best choice for production.

Use the Following Diagram to Answer the Following Questions