Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000^th gallon of gasoline entails the following:
• a private cost of $3.10;
• a social cost of $3.55;
• a value to consumers of $3.70.
-Refer to Scenario 10-1. Suppose the equilibrium quantity of gasoline is 1,150 gallons; that is, Q_MARKET = 1,150. Then the equilibrium price of a gallon could be

Question

Quizplus · Accepted Answer

The equilibrium price must be between the private cost ($3.10) and the value to consumers ($3.70). $3.30 is within this range.

Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply