-The marginal cost of educating a student is $30,000, and this cost is independent of the number of students. The figure above shows the marginal private benefit that a student receives from education. If schools are competitive, how many students are enrolled?
A) zero
B) 20,000
C) 50,000
D) It depends on the demand.

Question

-The marginal cost of educating a student is $30,000, and this cost is independent of the number of students. The figure above shows the marginal private benefit that a student receives from education. If schools are competitive, how many students are enrolled?
A) zero 
B) 20,000 
C) 50,000 
D) It depends on the demand.

Quizplus · Accepted Answer

The marginal cost of education is $30,000, and the marginal private benefit is $50,000. In a competitive market, schools will enroll students up to the point where the marginal cost equals the marginal benefit. Therefore, the correct answer is B) 20,000.

-The Marginal Cost of Educating a Student Is $30,000, and This