Figure 5.4
-Refer to Figure 5.4.The figure above represents the market for pecans.Assume that this is a competitive market.At a price of $3,

Question

Figure 5.4 
-Refer to Figure 5.4.The figure above represents the market for pecans.Assume that this is a competitive market.At a price of $3,

Quizplus · Accepted Answer

At a price of $3, the quantity demanded is 6,000 which is less than the quantity that would be socially optimal. This suggests that the marginal benefit of consuming an additional unit of pecans exceeds the marginal cost of producing it. Therefore, the market is inefficiently low, and producers should increase output to reach the socially optimal quantity.

Figure 5.4 -Refer to Figure 5.4.The Figure Above Represents the Market for the Market