Use the following to answer questions:
Figure: Price and Quantity 3
-(Figure: Price and Quantity 3) At a quantity of 80 units in the figure, it cost sellers ______ to produce the last unit, but buyers value this last unit at ______.
A) $80; $50
B) $50; $20
C) $20; $80
D) $80; $20

Question

Use the following to answer questions:
Figure: Price and Quantity 3 
-(Figure: Price and Quantity 3) At a quantity of 80 units in the figure, it cost sellers ______ to produce the last unit, but buyers value this last unit at ______.
A) $80; $50 
B) $50; $20 
C) $20; $80 
D) $80; $20

Quizplus · Accepted Answer

At a quantity of 80 units, the cost of producing the last unit is $80 (intersection of the MC curve and the quantity axis), but buyers value this last unit at $20 (intersection of the demand curve and the quantity axis). Therefore, the correct choice is D, which matches the cost of producing the last unit with the buyers' willingness to pay for it.

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