Figure 10.12 -Refer to Figure 10.12.The amount of excess capacity is A)Q₄ - Q₃ units B)Q₄ - Q₂ units C)Q₃ - Q₂ units D)Q₃ - Q₁ units

Question

Quizplus · Accepted Answer

The amount of excess capacity is equal to the difference between the quantity supplied at the socially optimal price (S1U1B0) and the quantity supplied at the minimum point of the average total cost curve (S1U1B12S1U1B0). Therefore, the correct answer is QS1U1B14S1U1B0 - QS1U1B12S1U1B0 units.

Figure 10.12 -Refer to Figure 10.12.The Amount of Excess Capacity Is