-The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social cost of the last pound is
A) $2.50.
B) $3.50.
C) $3.00.
D) $2.00.

Question

-The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social cost of the last pound is
A) $2.50. 
B) $3.50. 
C) $3.00. 
D) $2.00.

Quizplus · Accepted Answer

The efficient quantity of coffee is produced when the marginal social cost (MSC) is equal to the marginal social benefit (MSB). In the diagram, the MSC is represented by the upward-sloping curve, and the MSB is represented by the downward-sloping curve. The efficient quantity of coffee is produced at the point where the two curves intersect, which is at a price of $3.00 per pound.

-The Figure Above Shows the Market for Coffee