Figure 4-7
-Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If 20,000 units of iced tea are sold
A) the deadweight loss is equal to economic surplus.
B) producer surplus equals consumer surplus.
C) the marginal benefit of each of the 20,000 units of iced tea equals $3.
D) marginal benefit is equal to marginal cost.

Question

Figure 4-7 
-Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If 20,000 units of iced tea are sold
A) the deadweight loss is equal to economic surplus. 
B) producer surplus equals consumer surplus. 
C) the marginal benefit of each of the 20,000 units of iced tea equals $3. 
D) marginal benefit is equal to marginal cost.

Quizplus · Accepted Answer

In a competitive market, equilibrium is achieved when the quantity supplied equals the quantity demanded, meaning the marginal benefit equals the marginal cost.

Figure 4-7 -Refer to Figure 4-7. the Figure Above Represents the Market