The following graph shows the marginal cost (MC) and marginal benefit (MB) of holding real money balances. The market is initially in equilibrium at £100. Refer to the graph to answer the question. 
Suppose marginal cost increases to MC2 but marginal benefit remains unchanged. The new equilibrium level of real money balances will:
A) be equal to £75.
B) be equal to £175.
C) be equal to £200.
D) remain the same, at £100.
Correct Answer:
Verified
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