The following graph shows market equilibrium in the presence of an externality. The socially efficient price and level of output are:
Figure 17.2

A)$6 and 50 units, respectively
B)$12 and 50 units, respectively
C)$12 and 40 units, respectively
D)$6 and 40 units, respectively
E)less than $6 and more than 50 units, respectively

Question

The following graph shows market equilibrium in the presence of an externality. The socially efficient price and level of output are:​ ​
Figure 17.2
​

A)$6 and 50 units, respectively 
B)$12 and 50 units, respectively 
C)$12 and 40 units, respectively 
D)$6 and 40 units, respectively 
E)less than $6 and more than 50 units, respectively

Quizplus · Accepted Answer

The Answer of The following graph shows market equilibrium in the presence of an externality. The socially efficient price and level of output are:​ ​
Figure 17.2
​

A)$6 and 50 units, respectively 
B)$12 and 50 units, respectively 
C)$12 and 40 units, respectively 
D)$6 and 40 units, respectively 
E)less than $6 and more than 50 units, respectively

The Following Graph Shows Market Equilibrium in the Presence of an Externality