Figure 4-6 Figure 4-6 shows the market for granola. The market is initially in equilibrium at a price of P₁ and a quantity of Q₁. Now suppose producers decide to cut output to Q₂in order to raise the price to P_2.
-Refer to Figure 4-6. At the price P₂, consumers are willing to buy the Q₂ pounds of granola. Is this an economically efficient quantity?

Question

Figure 4-6

Figure 4-6 shows the market for granola. The market is initially in equilibrium at a price of P₁ and a quantity of Q₁. Now suppose producers decide to cut output to Q₂in order to raise the price to P_2.
-Refer to Figure 4-6. At the price P₂, consumers are willing to buy the Q₂ pounds of granola. Is this an economically efficient quantity?

Quizplus · Accepted Answer

The economically efficient quantity is achieved when the marginal benefit equals the marginal cost. If the marginal benefit exceeds the marginal cost, it indicates that more units should be produced for efficiency.

Figure 4-6 Figure 4-6 Shows the Market for Granola