-The above figure shows the market for steel ingots.The socially optimal quantity of steel is
A) 0 units.
B) 50 units.
C) 100 units.
D) the amount produced if the market were competitive.

Question

-The above figure shows the market for steel ingots.The socially optimal quantity of steel is
A) 0 units. 
B) 50 units. 
C) 100 units. 
D) the amount produced if the market were competitive.

Quizplus · Accepted Answer

The socially optimal quantity of steel is where the marginal social benefit equals the marginal social cost. Without seeing the figure, the typical assumption in such scenarios is that the competitive market outcome (where supply equals demand) reflects this balance. Given the choices and assuming a standard supply and demand model, 50 units is a common placeholder for such an equilibrium in theoretical examples.

-The Above Figure Shows the Market for Steel Ingots