Figure 15-15

Figure 15-15 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 15-15.What is the economically efficient output level and what is the price at that level?
A)Q₄, P₁
B)Q₃, P₂
C)Q₂, P₂
D)Q₂, P₃

Question

Figure 15-15
  
Figure 15-15 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 15-15.What is the economically efficient output level and what is the price at that level?
A)Q₄, P₁ 
B)Q₃, P₂ 
C)Q₂, P₂ 
D)Q₂, P₃

Quizplus · Accepted Answer

The economically efficient output level is where marginal cost (MC) equals marginal benefit (MB). In Figure 15-15, this occurs at Q₄, where MC = MB = P₁.

Figure 15-15 Figure 15-15 Shows the Cost and Demand Curves for the and Demand