Figure 7-22

-Refer to Figure 7-22.At the quantity Q3,
A) the market is in equilibrium.
B) consumer surplus is maximized.
C) the sum of consumer surplus and producer surplus is maximized.
D) the marginal value to buyers is less than the marginal cost to sellers.

Question

Figure 7-22
 
-Refer to Figure 7-22.At the quantity Q3,
A) the market is in equilibrium. 
B) consumer surplus is maximized. 
C) the sum of consumer surplus and producer surplus is maximized. 
D) the marginal value to buyers is less than the marginal cost to sellers.

Quizplus · Accepted Answer

At quantity Q3, the marginal value to buyers is less than the marginal cost to sellers, indicating that the market is not in equilibrium and there is inefficiency.

Figure 7-22 -Refer to Figure 7-22.At the Quantity Q3