Figure 10-2

-Refer to Figure 10-2.If this market currently produces Q₂,how could total economic well-being be maximized
A)if production decreased to Q₁
B)if output stayed at Q₂
C)if production increased to Q₃
D)if output decreased to zero

Question

Figure 10-2
 
-Refer to Figure 10-2.If this market currently produces Q₂,how could total economic well-being be maximized
A)if production decreased to Q₁ 
B)if output stayed at Q₂ 
C)if production increased to Q₃ 
D)if output decreased to zero

Quizplus · Accepted Answer

At Q₂, total economic well-being would be maximized because it represents the point where the marginal benefit (MB) of a good or service is equal to its marginal cost (MC). Moving to either side of Q₂ would result in a decrease in total surplus (consumer surplus + producer surplus). Therefore, option B, which suggests output staying at Q₂, is the best choice.

Figure 10-2 -Refer to Figure 10-2.If This Market Currently Produces Q₂,how Could