-In the above table, the efficient level of output can be achieved through a per unit
A) subsidy of $20.
B) tax of $20.
C) subsidy of $60.
D) tax of $60.

Question

-In the above table, the efficient level of output can be achieved through a per unit
A) subsidy of $20. 
B) tax of $20. 
C) subsidy of $60. 
D) tax of $60.

Quizplus · Accepted Answer

The efficient level of output is where marginal cost equals marginal benefit. In this case, the marginal cost is $40 and the marginal benefit is $60. To achieve the efficient level of output, the government can either subsidize production by $20 per unit or tax production by $20 per unit.

-In the Above Table, the Efficient Level of Output Can