Exhibit 17.1

-Refer to Exhibit 17.1,which shows a market for electricity.If producers base their output on marginal private cost,how much electricity is produced per month?
A)0 kilowatt-hours
B)50 million kilowatt-hours
C)75 million kilowatt-hours
D)between 0 and 50 million kilowatt-hours
E)between 50 and 75 million kilowatt-hours

Question

Exhibit 17.1
 
-Refer to Exhibit 17.1,which shows a market for electricity.If producers base their output on marginal private cost,how much electricity is produced per month?
A)0 kilowatt-hours 
B)50 million kilowatt-hours 
C)75 million kilowatt-hours 
D)between 0 and 50 million kilowatt-hours 
E)between 50 and 75 million kilowatt-hours

Quizplus · Accepted Answer

When producers base their output on marginal private cost, they produce where their marginal private cost curve intersects the demand curve. This point represents the quantity of electricity produced where the producers' cost of producing an additional unit equals the price consumers are willing to pay for that unit. Without seeing Exhibit 17.1, the typical interpretation in such scenarios is that producers will produce at a level where demand equals supply, which often results in a quantity that is not at the extremes (0 or maximum possible). Given the options, the choice suggesting a specific quantity (75 million kilowatt-hours) likely indicates the equilibrium quantity based on marginal private costs, assuming this choice aligns with common outcomes in such market diagrams.

Exhibit 17.1 -Refer to Exhibit 17.1,which Shows a Market for Electricity.If Producers