Refer to the information provided in Figure 16.2 below to answer the question(s) that follow. Figure 16.2
-Refer to Figure 16.2. The efficient amount of cars is
A) 25.
B) 35.
C) zero because any production results in an external cost.
D) indeterminate from the information given.

Question

Refer to the information provided in Figure 16.2 below to answer the question(s) that follow.  Figure 16.2
-Refer to Figure 16.2. The efficient amount of cars is
A) 25. 
B) 35. 
C) zero because any production results in an external cost. 
D) indeterminate from the information given.

Quizplus · Accepted Answer

The efficient amount of cars is 25 because at this quantity, the marginal social cost (MSC) equals the marginal social benefit (MSB).

Refer to the Information Provided in Figure 16