Exhibit 17.1

-Refer to Exhibit 17.1 which shows a market for electricity.If producers base their output decisions on marginal social cost,the optimal output is _____
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 decisions on marginal social cost,the optimal output is _____
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

The optimal output in a market occurs where the marginal social cost (MSC) equals the marginal social benefit (MSB). Without seeing Exhibit 17.1, the correct answer cannot be determined directly from the question. However, assuming that the question implies producers are considering the social costs and the optimal output is mentioned as one of the options, the choice that typically represents a positive quantity that could be considered optimal in a standard market scenario is 50 million kilowatt-hours. This is a common type of optimal output level for utility markets in theoretical economics, assuming the MSC curve intersects the MSB curve at this point.

Exhibit 17.1 -Refer to Exhibit 17.1 Which Shows a Market for Electricity.If