Use the figure below to answer the following questions.

Figure 16.3.1
-Refer to Figure 16.3.1. The figure shows the marginal private benefit curve, the marginal social benefit curve, and the market supply curve. If production is left to the private market, then the price is
A)P₁.
B)P₃.
C)P₂.
D)greater than P₄.
E)P₄.

Question

Use the figure below to answer the following questions.
  
Figure 16.3.1
-Refer to Figure 16.3.1. The figure shows the marginal private benefit curve, the marginal social benefit curve, and the market supply curve. If production is left to the private market, then the price is
A)P₁. 
B)P₃. 
C)P₂. 
D)greater than P₄. 
E)P₄.

Quizplus · Accepted Answer

The equilibrium price in a private market is where the market supply curve intersects the marginal private benefit curve, which is at point P₂.

Use the Figure Below to Answer the Following Questions