Suppose for a given market that the MWTP and MC curves are represented in Figure 4.1. Assuming all market and non-market values are incorporated into the data, the MWTP at the socially efficient level of output is equal to ________.

Question

Quizplus · Accepted Answer

The socially efficient level of output occurs where the MWTP equals the MC. From Figure 4.1, this occurs at an output level of 80 units and a price of $250. Therefore, the MWTP at the socially efficient level of output is $250.

Suppose for a Given Market That the MWTP and MC