(Figure: ABC Company) The figure depicts the market for awater cleaner for home aquariums. After use it gets washeddown drains and enters into streams where it improves themineral content of the water and thus leads to better waterquality and better fish growth. What is the efficient quantityin this market?

Question

Quizplus · Accepted Answer

The efficient quantity is where the marginal social benefit (MSB) equals the marginal social cost (MSC), which is at a quantity of 2,000. This is the point where the market is producing the optimal amount of the water cleaner for home aquariums, taking into account both the benefits and costs to society as a whole.

(Figure: ABC Company) the Figure Depicts the Market for Awater