Figure 11.1
-Refer to Figure 11.1.The figure above represents the market for pecans.Assume that this is a competitive market.If 8000 metrics of pecans are sold,

Question

Figure 11.1 
-Refer to Figure 11.1.The figure above represents the market for pecans.Assume that this is a competitive market.If 8000 metrics of pecans are sold,

Quizplus · Accepted Answer

In a competitive market, the optimal quantity sold is where marginal benefit equals marginal cost. Therefore, if 8000 metrics of pecans are sold, it implies that the market is at equilibrium and marginal benefit is equal to marginal cost. Option A is incorrect because deadweight loss (reduction in economic efficiency) is only equal to economic surplus when the market is not at equilibrium. Option B is incorrect because in a competitive market, producer surplus and consumer surplus are not necessarily equal. Option C is incorrect because we do not have information about the marginal benefit of each metric of pecans.

Figure 11.1 -Refer to Figure 11.1.The Figure Above Represents the Market for the Market