Use the following to answer question(s): Markets and Efficiency

-(Exhibit: Markets and Efficiency) The equilibrium price in Panel (a) tells us that the marginal cost of a pound of apples is:
A) less than $0.80.
B) equal to $0.80.
C) greater than $0.80.
D) equal to the average cost of producing apples.

Question

Use the following to answer question(s): Markets and Efficiency
 
-(Exhibit: Markets and Efficiency) The equilibrium price in Panel (a) tells us that the marginal cost of a pound of apples is:
A) less than $0.80. 
B) equal to $0.80. 
C) greater than $0.80. 
D) equal to the average cost of producing apples.

Quizplus · Accepted Answer

The equilibrium price in Panel (a) is $0.80, which means that the market has found the price at which the quantity supplied and the quantity demanded are equal. At this price, the marginal cost of producing a pound of apples is equal to the price, which is $0.80. Therefore, the answer is B, which states that the marginal cost of a pound of apples is equal to $0.80.

Use the Following to Answer Question(s): Markets and Efficiency