Figure 10-15
Figure 10-15 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 10-15.What is the economically efficient output level and what is the price at that level?

Question

Figure 10-15
  Figure 10-15 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 10-15.What is the economically efficient output level and what is the price at that level?

Quizplus · Accepted Answer

The economically efficient output level is Q₂, where the marginal cost (MC) curve intersects the marginal benefit (MB) curve. At this level, the price is P₂, which is the height of the demand curve at Q₂.

Figure 10-15 Figure 10-15 Shows the Cost and Demand Curves