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 a subsidy is granted that generates an efficient quantity, then the quantity produced is
A)zero.
B)Q₁.
C)Q₂.
D)Q₃.
E)greater than Q₃.

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 a subsidy is granted that generates an efficient quantity, then the quantity produced is
A)zero. 
B)Q₁. 
C)Q₂. 
D)Q₃. 
E)greater than Q₃.

Quizplus · Accepted Answer

The efficient quantity is achieved when the marginal social benefit equals the marginal cost, which is typically represented by the market supply curve. In this context, Q₃ represents the efficient quantity where the subsidy aligns the private and social benefits.

Use the Figure Below to Answer the Following Questions