Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. Which of the following is true?
A) Both 10,000 and 30,000 are economically inefficient rates of output.
B) If the price of iced tea is $3, consumers will purchase more than the economically efficient output.
C) If the price of iced tea is $3, the output will be economically efficient but there will be a deadweight loss.
D) If the price of iced tea is $3, producers will sell 30,000 units of iced tea but this output will be economically inefficient.
Answer: A) Both 10,000 and 30,000 are economically inefficient rates of output.
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