The following table shows the marginal private benefits and marginal private cost of providing daycare spaces in the province:

-Refer to the above information to answer this question.Given the marginal private benefits and marginal private costs of providing daycare spaces,what is the equilibrium quantity of daycare spaces provided in the market?
A)3,000.
B)5,000.
C)7,000.
D)8,000.
E)9,000.

Question

The following table shows the marginal private benefits and marginal private cost of providing daycare spaces in the province:
 
-Refer to the above information to answer this question.Given the marginal private benefits and marginal private costs of providing daycare spaces,what is the equilibrium quantity of daycare spaces provided in the market?
A)3,000. 
B)5,000. 
C)7,000. 
D)8,000. 
E)9,000.

Quizplus · Accepted Answer

The equilibrium quantity is where the marginal private benefit (MPB) equals the marginal private cost (MPC). In the given table, we can see that at 7,000 daycare spaces, the MPB and MPC intersect at a value of $5,500. At any point above this quantity, the MPC is higher than the MPB, indicating that the cost of providing daycare spaces exceeds the benefit. At any point below this quantity, the MPB is higher than the MPC, indicating that the benefit of providing daycare spaces exceeds the cost. Therefore, the equilibrium quantity of daycare spaces provided in the market is 7,000.

The Following Table Shows the Marginal Private Benefits and Marginal