When 2,000 hamburgers a day are produced, the marginal social benefit from the 2000th hamburger is $1.50 and its marginal social cost is $1.00. And when 7,500 hamburgers a day are produced, the marginal social benefit from the 2000th hamburger is $1.00 and its marginal social cost is $1.50. The efficient quantity of hamburgers is ________ a day
A)less than 2,000
B)between 2,000 and 7,500
C)more than 7,500
D)zero
E)2,000

Question

Quizplus · Accepted Answer

The efficient quantity is where marginal social benefit equals marginal social cost. Since at 2,000 hamburgers, the benefit is greater than the cost, and at 7,500 hamburgers, the cost is greater than the benefit, the efficient quantity must be between these two values.

When 2,000 Hamburgers a Day Are Produced, the Marginal Social