Use the table below to answer the following questions.
Table 16.3.1

-Refer to Table 16.3.1. The table shows marginal private benefit and the marginal social benefit from the consumption of chemical fertilizer and the marginal social cost of the production of fertilizer. An efficient quantity is produced if the government
A)subsidizes production by $20 per unit.
B)subsidizes production by $10 per unit.
C)provides vouchers for consumption of $20 per unit.
D)taxes production by $10 per unit.
E)either A or C.

Question

Use the table below to answer the following questions.
Table 16.3.1
 
-Refer to Table 16.3.1. The table shows marginal private benefit and the marginal social benefit from the consumption of chemical fertilizer and the marginal social cost of the production of fertilizer. An efficient quantity is produced if the government
A)subsidizes production by $20 per unit. 
B)subsidizes production by $10 per unit. 
C)provides vouchers for consumption of $20 per unit. 
D)taxes production by $10 per unit. 
E)either A or C.

Quizplus · Accepted Answer

An efficient quantity is produced when the marginal social benefit equals the marginal social cost. Subsidizing production or consumption by $20 per unit aligns the private benefit with the social benefit, achieving efficiency.

Use the Table Below to Answer the Following Questions