Table 10-3

$$\begin{array} { | c | c | c | c | }
\hline \begin{array} { c }
\text { Quantity } \
\text { (Units) }
\end{array} & \begin{array} { c }
\text { Private Value } \
\text { (Dollars) }
\end{array} & \begin{array} { c }
\text { Private Cost } \
\text { (Dollars) }
\end{array} & \begin{array} { c }
\text { External Benefit } \
\text { (Dollars) }
\end{array} \
\hline 1 & 22 & 12 & 10 \
\hline 2 & 20 & 15 & 10 \
\hline 3 & 18 & 18 & 10 \
\hline 4 & 16 & 21 & 10 \
\hline 5 & 14 & 24 & 10 \
\hline 6 & 12 & 27 & 10 \
\hline
\end{array}$$
-Refer to Table 10-3. Taking into account private and external benefits, the total surplus to society at the socially efficient quantity is

Question

Table 10-3
​
​
 $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Private Value } \
\text { (Dollars) }
\end{array} & \begin{array} { c } 
\text { Private Cost } \
\text { (Dollars) }
\end{array} & \begin{array} { c } 
\text { External Benefit } \
\text { (Dollars) }
\end{array} \
\hline 1 & 22 & 12 & 10 \
\hline 2 & 20 & 15 & 10 \
\hline 3 & 18 & 18 & 10 \
\hline 4 & 16 & 21 & 10 \
\hline 5 & 14 & 24 & 10 \
\hline 6 & 12 & 27 & 10 \
\hline
\end{array}$$
-Refer to Table 10-3. Taking into account private and external benefits, the total surplus to society at the socially efficient quantity is

Quizplus · Accepted Answer

The socially efficient quantity is where the sum of private value and external benefit equals private cost. At quantity 3, private value (18) + external benefit (10) = private cost (18). The total surplus is the sum of (private value + external benefit - private cost) for quantities 1 to 3: (22+10-12) + (20+10-15) + (18+10-18) = 10 + 15 + 10 = 35.

Table 10-3 ​ ​ -Refer to Table 10-3

Table 10-3

-Refer to Table 10-3