Figure 10.12 -Refer to Figure 10.12.The allocatively efficient output for the firm represented in the diagram is A)Q₁ units B)Q₂ units C)Q₃ units D)Q₄ units

Question

Quizplus · Accepted Answer

The allocatively efficient output occurs where the marginal cost (MC) equals the marginal benefit (MB), which is where the demand curve intersects the marginal cost curve. In this diagram, that point is shown as point S1U1B13. Therefore, the allocatively efficient output is QS1U1B13S1U1B0 units.

Figure 10.12 -Refer to Figure 10.12.The Allocatively Efficient Output for the Firm