The figure above shows the market for coffee. If one firm owns all the coffee outlets and sells 10 million pounds of coffee a month
A) the market is efficient because the marginal social benefit from coffee exceeds its marginal social cost.
B) the market is efficient because the total social benefit from coffee exceed the total social cost.
C) there is a deadweight loss because the marginal social benefit from the last pound of coffee exceeds its marginal social cost.
D) there is a deadweight loss because the marginal social cost of the last pound of coffee exceeds its marginal social benefit.
C
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following is an administered interest rate set by the Federal Reserve?
A) The discount rate B) The federal funds rate C) The prime rate D) The commercial paper rate
If total cost is $1,000 when output is zero, and total cost is $1,200 when output is one, and total cost is $1,500 when output is two, then which of the following is true?
a. Total fixed cost is $1,500. b. The marginal cost of producing the first unit of output is $1,200. c. The marginal cost of producing the second unit of output is $300. d. The average fixed cost is $750 when two units of output are produced.
When the social costs of producing or consuming a good exceed the private costs, _____
a. a positive externality exists b. an inefficiently high quantity of the good will be produced and consumed, from the society's point of view c. the direct consumers of the good will bear the external costs d. the individuals involved in the production of the good do not bear the private costs e. the quantity of the good produced will be less than the socially efficient level