Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 30,000 units
A) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently high.
B) producers should raise the price to $3 in order to sell the quantity demanded of 30,000.
C) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low.
A
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