When 2,000 hamburgers a day are produced, the marginal social benefit from the 2000ᵗʰ hamburger is $1.50 and its marginal social cost is $1.00.And when 7,500 hamburgers a day are produced, the marginal social benefit from the 2000ᵗʰ hamburger is $1.00 and its marginal social cost is $1.50.The efficient quantity of hamburgers is ________ a day
A)less than 2,000
B)between 2,000 and 7,500
C)more than 7,500
D)zero
E)2,000

Question

Quizplus · Accepted Answer

The efficient quantity of hamburgers is the one where marginal social benefit equals marginal social cost. Since at 2,000 hamburgers a day the marginal social benefit is greater than the marginal social cost, the production should increase. Similarly, at 7,500 hamburgers a day the marginal social cost is greater than the marginal social benefit, so the production should decrease. Therefore, the efficient quantity of hamburgers produced should be between 2,000 and 7,500 hamburgers a day.

When 2,000 Hamburgers a Day Are Produced, the Marginal Social