Exhibit 17.8

-Refer to Exhibit 17.8,which shows the demand,the supply,and the marginal social benefit curves.An unregulated market would produce ______
A)0 units.
B)10 units.
C)20 units.
D)40 units.
E)50 units.

Question

Exhibit 17.8
 
-Refer to Exhibit 17.8,which shows the demand,the supply,and the marginal social benefit curves.An unregulated market would produce ______
A)0 units. 
B)10 units. 
C)20 units. 
D)40 units. 
E)50 units.

Quizplus · Accepted Answer

In an unregulated market, the equilibrium point is where the demand curve intersects with the supply curve. This occurs at a quantity of 20 units and a price of $6 per unit. At this point, the marginal social benefit (MSB) is equal to the marginal private cost (MPC), and the market is efficient. Any other quantity would result in either a surplus or a shortage of goods. Therefore, the unregulated market would produce 20 units.

Exhibit 17.8 -Refer to Exhibit 17.8,which Shows the Demand,the Supply,and the Marginal