Use the following to answer questions: Table: Costs of Antibiotics $$\begin{array} { c c c c c }
\hline \begin{array} { c }
\text { Quantity of } \
\text { Antibiotics }
\end{array} & \begin{array} { c }
\text { Marginal Benefit } \
\text { to Buyers }
\end{array} & \begin{array} { c }
\text { Marginal Cost } \
\text { to Sellers }
\end{array} & \begin{array} { c }
\text { External } \
\text { Cost }
\end{array} & \begin{array} { c }
\text { Marginal Social } \
\text { Cost }
\end{array} \
\hline 1 & \$ 25 & \$ 5 & \$ 10 & ? \
2 & \$ 20 & \$ 10 & \$ 10 & ? \
3 & \$ 15 & \$ 15 & \$ 10 & ? \
4 & \$ 10 & \$ 20 & \$ 10 & ? \
5 & \$ 5 & \$ 25 & \$ 10 & ? \
\hline
\end{array}$$
-(Table: Costs of Antibiotics) Refer to the table. The market equilibrium quantity is ________ and the efficient equilibrium quantity is ________.
A) 5; 1
B) 3; 4
C) 3; 2
D) 2; 5

Question

Use the following to answer questions: Table: Costs of Antibiotics $$\begin{array} { c c c c c } 
\hline \begin{array} { c } 
\text { Quantity of } \
\text { Antibiotics }
\end{array} & \begin{array} { c } 
\text { Marginal Benefit } \
\text { to Buyers }
\end{array} & \begin{array} { c } 
\text { Marginal Cost } \
\text { to Sellers }
\end{array} & \begin{array} { c } 
\text { External } \
\text { Cost }
\end{array} & \begin{array} { c } 
\text { Marginal Social } \
\text { Cost }
\end{array} \
\hline 1 & \$ 25 & \$ 5 & \$ 10 & ? \
2 & \$ 20 & \$ 10 & \$ 10 & ? \
3 & \$ 15 & \$ 15 & \$ 10 & ? \
4 & \$ 10 & \$ 20 & \$ 10 & ? \
5 & \$ 5 & \$ 25 & \$ 10 & ? \
\hline
\end{array}$$
-(Table: Costs of Antibiotics) Refer to the table. The market equilibrium quantity is ________ and the efficient equilibrium quantity is ________.
A) 5; 1
B) 3; 4
C) 3; 2
D) 2; 5

Quizplus · Accepted Answer

The market equilibrium occurs where marginal benefit equals marginal cost to sellers, which is at quantity 3. The efficient equilibrium considers the external cost, so it occurs where marginal benefit equals marginal social cost, which is at quantity 2.

Use the Following to Answer Questions: Table: Costs of Antibiotics