-Exhibit N-3 depicts a market showing the demand curve for a good and two supply curves, one reflecting the industry's private costs; the other reflecting the costs of resources to society producing the good. It is clear from this representation of the marketthat the market-generated price and output would be
A) $4.00 and 32
B) $4.00 and 24
C) $3.70 and 32
D) $3.70 and 24
E) $3.85 and 28

Question

-Exhibit N-3 depicts a market showing the demand curve for a good and two supply curves, one reflecting the industry's private costs; the other reflecting the costs of resources to society producing the good. It is clear from this representation of the marketthat the market-generated price and output would be
A) $4.00 and 32 
B) $4.00 and 24 
C) $3.70 and 32 
D) $3.70 and 24 
E) $3.85 and 28

Quizplus · Accepted Answer

The market-generated price and output would be $3.70 and 32 because the equilibrium price is where the demand curve intersects the supply curve. The demand curve shows the quantity of a good that consumers are willing and able to buy at different prices. The supply curve shows the quantity of a good that producers are willing and able to sell at different prices. The equilibrium price is the price at which the quantity of a good that consumers are willing and able to buy is equal to the quantity of a good that producers are willing and able to sell.

-Exhibit N-3 Depicts a Market Showing the Demand Curve for a Good