The diagram below shows the supply and demand diagrams for the competitive market for honey in one region.MC 0 represents private marginal cost and MB 0 represents private marginal benefit. FIGURE 16-3
-Refer to Figure 16-3.Assume there are two types of firms in this region - beekeepers that produce honey and orchard keepers that produce peaches.The bees provide a benefit to the orchard keepers by pollinating their peach trees.In the absence of any government intervention,the equilibrium price and quantity in the honey market are
A)$5 and 60 kg.
B)$5 and 100 kg.
C)$7 and 80 kg.
D)$9 and 60 kg.
E)$11 and 80 kg.

Question

The diagram below shows the supply and demand diagrams for the competitive market for honey in one region.MC 0 represents private marginal cost and MB 0 represents private marginal benefit.  FIGURE 16-3
-Refer to Figure 16-3.Assume there are two types of firms in this region - beekeepers that produce honey and orchard keepers that produce peaches.The bees provide a benefit to the orchard keepers by pollinating their peach trees.In the absence of any government intervention,the equilibrium price and quantity in the honey market are
A)$5 and 60 kg. 
B)$5 and 100 kg. 
C)$7 and 80 kg. 
D)$9 and 60 kg. 
E)$11 and 80 kg.

Quizplus · Accepted Answer

In the absence of any government intervention, the equilibrium price and quantity are determined where the supply curve (represented by private marginal cost) intersects the demand curve (represented by private marginal benefit). This occurs at a price of $7 and a quantity of 80 kg.

The Diagram Below Shows the Supply and Demand Diagrams for the Competitive