Figure 5.4
-Refer to Figure 5.4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following statements is true if 8000 metrics of pecans are sold?

Question

Figure 5.4 
-Refer to Figure 5.4.The figure above represents the market for pecans.Assume that this is a competitive market.Which of the following statements is true if 8000 metrics of pecans are sold?

Quizplus · Accepted Answer

In a competitive market, the efficient outcome is achieved when marginal benefit equals marginal cost. Thus, if 8000 metrics of pecans are sold, the optimal point would be where the marginal benefit of the last unit sold equals the marginal cost of producing it. Therefore, D is the correct answer. (A) is false because deadweight loss is the loss in economic surplus due to inefficiency caused by market distortions. (B) is false because in a competitive market, producer surplus and consumer surplus are not necessarily equal. (C) is false because we don't have information to determine the marginal benefit of each unit sold.

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