Use the figure below to answer the following questions.

Figure 17.3.2
-Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. The equilibrium in an unregulated market is
A)0 goats.
B)40 goats.
C)50 goats.
D)55 goats.
E)35 goats.

Question

Use the figure below to answer the following questions.
  
Figure 17.3.2
-Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. The equilibrium in an unregulated market is
A)0 goats. 
B)40 goats. 
C)50 goats. 
D)55 goats. 
E)35 goats.

Quizplus · Accepted Answer

The equilibrium in an unregulated market occurs where the marginal private cost curve intersects the marginal social benefit curve, which is at 50 goats. At this quantity, the marginal social cost is equal to the marginal social benefit, meaning that society is allocating resources efficiently. Therefore, choice C is the best choice.

Use the Figure Below to Answer the Following Questions