Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 10,000 units

A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
B) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low.
C) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently low.
D) producers should lower the price to $1 in order to sell the quantity demanded of 10,000.


B

Economics

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