Economics for Today 9th Edition by Irvin Tucker

Exercise 51

In a perfectly competitive industry, which of the following is true ?
A) The competitive price is higher and the quantity is higher than the socially efficient point.
B) The competitive price is higher and the quantity is lower than the socially efficient point.
C) Since the industry is perfectly competitive, price and quantity are at the socially efficient levels.
D) The competitive price is lower and the quantity is higher than the socially efficient point.
Each time Orville flies over Wilbur's house, the noise reduces the value of Wilbur's house. Exhibit 7 shows the profits to Orville of each flight and the value of Wilbur's house at each flight.