In the figure given below,D 1 and S 1 are the private demand and supply curves,of a commodity produced by a competitive firm.S 2 reflects the social marginal cost of production,while S 0 represents the external marginal cost.
-Refer to Figure 20-1.When the efficient output is being produced,the price of the good must be:
A)$90.
B)$108.
C)$100.
D)$40.

Question

In the figure given below,D 1 and S 1 are the private demand and supply curves,of a commodity produced by a competitive firm.S 2 reflects the social marginal cost of production,while S 0 represents the external marginal cost. 
-Refer to Figure 20-1.When the efficient output is being produced,the price of the good must be:
A)$90. 
B)$108. 
C)$100. 
D)$40.

Quizplus · Accepted Answer

At the point where the social marginal cost curve (S₂) intersects the private demand curve (D₁), the market achieves its efficient output level. This occurs at a quantity of 60 units, and the price at this level is $100 (as shown by the vertical line extending from this quantity on the demand curve). Therefore, the correct answer is (C) $100.

In the Figure Given Below,D1 and S1 Are the Private

In the Figure Given Below,D₁ and S₁ Are the Private