Figure 4-7
-Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. Which of the following is true?
A) If the price of iced tea is $3, the output will be economically efficient but there will be a deadweight loss.
B) If the price of iced tea is $3, consumers will purchase more than the economically efficient output.
C) Both 10,000 and 30,000 are economically inefficient rates of output.
D) If the price of iced tea is $3, producers will sell 30,000 units of iced tea but this output will be economically inefficient.

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. Which of the following is true?
A) If the price of iced tea is $3, the output will be economically efficient but there will be a deadweight loss. 
B) If the price of iced tea is $3, consumers will purchase more than the economically efficient output. 
C) Both 10,000 and 30,000 are economically inefficient rates of output. 
D) If the price of iced tea is $3, producers will sell 30,000 units of iced tea but this output will be economically inefficient.

Quizplus · Accepted Answer

Both 10,000 and 30,000 are economically inefficient rates of output because they do not correspond to the equilibrium quantity where supply equals demand, leading to either excess supply or demand.

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