Answer-
The correct answer is B.
Socially optimal price is the price which is equal to MC.
Optimal price is achieved when the cosumer get optimal satisfaction from the product.
Price, Cost 3 P D P4 4 P3 3 C P2 2 B Р. 2 0 21 Q2 Quantity If a positive externality exists then market equilibrium price is P3 P4 OP1 OP2
Price, Cost 3 D Pa P3 ON C P2 2 B P1 A 2 0 Q1 Quantity If a positive externality exists then curve 1 represents marginal private benefit marginal social cost o marginal private cost marginal social benefit
Question 32 (1 point) Figure 8-5 Price Quantity Refer to Figure 8-5. What is the price buyers pay after the tax and the quantity buyers receive? OP1 and 1 OP2 and Q2 OP3 and Q2 OP3 and Q1
Question 6 1 pts 1 Price MC ATC AVC P3 P6 pa P3 P2 P1 Q1 02 03 04 QS Shutdown point is at O p1 Op3 Op4 O p7 Question 7 1 pts Price MC ATC AVC P7 P6 P3 P2 PI Q1 02 03 04 Q3 Quantity Exit point is at Op4 O p1 Op3 O p7
10 In the figure below, what is the size of the externality, and what is the socially optimal quantity? Supply (Private Cost) Social Cost Price Po P. P2 Ps Demand (social value) Q2 Quantity Q3 Q4 a) P1-P3 is the size of the externality, and the socially optimal quantity is Q1. b) P1-P3 is the size of the externality, and the socially optimal quantity is Q2 c) P1-P2 is the size of the externality, and the socially optimal quantity is...
Graph Worksheet MC DI MR P4 ATC P3 P2 AVC PI 02 1. What is the price and quantity at the optimum level of production? Is this an economic profit, loss, or break-even? Should the firm produce? 2. If the industry model is monopolistic competition, what will happen to the industry? What will happen to the demand and marginal revenue curves for the individual firm? In the long run where will the demand curve be? Will the firm achieve productive...
Per Unit Costs Cost per Unit (5) Q, QQ Output Quantity What is the profit-maximizing price and level of output for the monopolist? Price=P1 Quantity=Q1 Price=P3 & Quantity=Q3 Price=P4 & Quantity=Q1 Price=P2 & Quantity=Q1 O Price=P3 & Quantity=Q1 Question 7 (1 point) Per Unit Costs Cost per Unit (5) Q, QO Output Quantity What area shows the deadweight loss to society resulting from the monopolist's output decision? Area: D,B,F Area: P4, P3, D, F O Area: P2, P1, B, E...
Figure 7-23 PMce P4 Supply B :C P2 - D H Q102 Refer to Figure 7-23. The efficient price-quantity combination is a. Pl and Q1 b. P2 and Q2 c. P3 and Q1 d. P4 and0
O B А P1 P2 P3 P4 late aetabotex-te- External forces on a bracket are as shown in the figure, If P1 = 20 kN,P2 = -10 kN, P3 =P4 = 15 kN, and 'x' = 0.65m. Which of the following expressions can correctly evaluate the reaction at A? Select one: O A. RA = (19.5 + 150 - 10a + 10b))/(a+b) B. RA = (19.5 - 150 + 20b)/(a+b) C. RA = (19.5 - 150 - 20(a+b))/(a+b) D. RA...
1. The graph below depicts the cost structure for a firm in a
competitive market.
a. When price rises from P2 to P3, the
firm finds that...
. Group of answer choices
expanding output to Q4 would leave the firm with losses.
it could increase profits by lowering output from Q3 to Q2.
if it produces at output level Q3 it will earn a positive
profit.
b.When price falls from P3 to P1, the firm
finds that
Group of answer...