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

-(Exhibit: Markets and Efficiency) In Panel (b) demand shifted from D₁ to D₂, reflecting a change in consumer preferences.The price of apples will change to the new equilibrium price:
A) where the marginal benefit of apples is again equal to the marginal cost.
B) of $0.70.
C) where an efficient solution is again achieved.
D) that is described by all of the above.

Question

Use the following to answer question(s): Markets and Efficiency
 
-(Exhibit: Markets and Efficiency) In Panel (b) demand shifted from D₁ to D₂, reflecting a change in consumer preferences.The price of apples will change to the new equilibrium price:
A) where the marginal benefit of apples is again equal to the marginal cost. 
B) of $0.70. 
C) where an efficient solution is again achieved. 
D) that is described by all of the above.

Quizplus · Accepted Answer

The new equilibrium price will represent where the marginal benefit of apples is again equal to the marginal cost, as well as where an efficient solution is again achieved. This is the price where the quantity demanded by consumers (D₂) equals the quantity supplied by producers (S). Therefore, the answer is D because it includes all of the above options.

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