-Leisure Land produces only sunscreen and camel rides. The table shows the marginal benefit and marginal cost schedules for sunscreen and camel rides. The allocatively efficient number of camel rides is ________.
A) 1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible
B) 2 rides per day
C) 4 rides per day
D) 6 rides per day because that is the maximum number of rides

Question

-Leisure Land produces only sunscreen and camel rides. The table shows the marginal benefit and marginal cost schedules for sunscreen and camel rides. The allocatively efficient number of camel rides is ________.
A) 1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible 
B) 2 rides per day 
C) 4 rides per day 
D) 6 rides per day because that is the maximum number of rides

Quizplus · Accepted Answer

The allocatively efficient quantity is where marginal benefit equals marginal cost, which is typically at 4 rides per day.

-Leisure Land Produces Only Sunscreen and Camel Rides