Refer to Scenario 16.2 below to answer the question(s) that follow. SCENARIO 16.2: The marginal benefit for a particular food is described by MB = 60 - q, where q refers to the quantity of the food. The marginal cost of producing the food is described by MC = 3q. There is a negative externality associated with food production and the marginal social cost of food production is MSC = 5q.Refer to Scenario 16.2. The efficient output level is ________ and the efficient price is ________.
A. 10 units of food; $50
B. 20 units of food; $40
C. 0 units of food; $0
D. 10 units of food; $20
Answer: A
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Any change that shifts the supply curve outward to the right and does not affect the demand curve will lower the equilibrium price and raise the equilibrium.
Answer the following statement true (T) or false (F)
A firm is a ______ when it can sell as much as it wants at some given price P, but nothing at any higher price.
A. monopoly B. oligopoly C. price taker D. price setter
Big Alice Ice Cream Parlor reduced its price of an ice cream cone from $1 to 90 cents. Sales consequently increased from 1,000 cones per week to 1,050 . The approximate price elasticity is
a. 0.20. b. 0.46. c. 2.16. d. 5.00.
A perfectly price-discriminating monopolist:
A. increases both consumer surplus and producer surplus. B. reduces or eliminates the welfare loss from monopoly. C. creates more consumer surplus for the consumer. D. increases the welfare loss from monopoly.