-In the above figure, CBL is the cost of breaking the law. If it is illegal to sell, but not illegal to buy, then the price per unit will be
A) $500.
B) $400.
C) $300.
D) $200.

Question

-In the above figure, CBL is the cost of breaking the law. If it is illegal to sell, but not illegal to buy, then the price per unit will be
A) $500. 
B) $400. 
C) $300. 
D) $200.

Quizplus · Accepted Answer

If it is illegal to sell, but not illegal to buy, then the price per unit will be $500. This is because the cost of breaking the law (CBL) is $200, and the price per unit (P) is equal to the marginal cost of production (MC) plus the CBL. In this case, the MC is $300, so the P is $300 + $200 = $500.

-In the Above Figure, CBL Is the Cost of Breaking