The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MC P ,and the marginal cost to society,MC S ,at each level of output of some good. FIGURE 17-1
-Refer to Figure 17-1.The price that leads consumers to demand the socially optimal quantity of output is

Question

The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MC P ,and the marginal cost to society,MC S ,at each level of output of some good.  FIGURE 17-1
-Refer to Figure 17-1.The price that leads consumers to demand the socially optimal quantity of output is

Quizplus · Accepted Answer

The socially optimal quantity of output is where MC_S intersects with MB, which occurs at output level Q1. The price that corresponds to output level Q1 is P₃, which is the answer choice D. At this price, consumers will demand Q1, which is the socially optimal level of output.

The Figure Below Shows the Marginal Benefit to Consumers,MB,the Marginal