-The figure above shows the market for coffee. If the government pays the coffee producers a subsidy and production increases to 30 million pounds per day, the market is
A) efficient because the marginal social benefit from the last pound of coffee exceeds its marginal social cost.
B) efficient because the total social benefit from coffee exceed the total social cost.
C) inefficient because the marginal social benefit from the last pound of coffee exceeds its marginal social cost.
D) inefficient because the marginal social cost of the last pound of coffee exceeds its marginal social benefit.

Question

-The figure above shows the market for coffee. If the government pays the coffee producers a subsidy and production increases to 30 million pounds per day, the market is
A) efficient because the marginal social benefit from the last pound of coffee exceeds its marginal social cost. 
B) efficient because the total social benefit from coffee exceed the total social cost. 
C) inefficient because the marginal social benefit from the last pound of coffee exceeds its marginal social cost. 
D) inefficient because the marginal social cost of the last pound of coffee exceeds its marginal social benefit.

Quizplus · Accepted Answer

The marginal social cost of the last pound of coffee exceeds its marginal social benefit.

-The Figure Above Shows the Market for Coffee