Use the following figure to answer the question : Figure 20-1 : 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.A comparison between the efficient outcome and the market equilibrium reveals that:
A)the price level when the outcome is efficient is higher than the price at the market equilibrium by $30.
B)the price level when the outcome is efficient is lower than the price at the market equilibrium by $10.
C)the price level when the outcome is efficient is lower than the price at the market equilibrium by $40.
D)the price level when the outcome is efficient is higher than the price at the market equilibrium by $20.

Question

Use the following figure to answer the question : Figure 20-1 : 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.A comparison between the efficient outcome and the market equilibrium reveals that:
A)the price level when the outcome is efficient is higher than the price at the market equilibrium by $30. 
B)the price level when the outcome is efficient is lower than the price at the market equilibrium by $10. 
C)the price level when the outcome is efficient is lower than the price at the market equilibrium by $40. 
D)the price level when the outcome is efficient is higher than the price at the market equilibrium by $20.

Quizplus · Accepted Answer

The Answer of Use the following figure to answer the question : Figure 20-1 : 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.A comparison between the efficient outcome and the market equilibrium reveals that:
A)the price level when the outcome is efficient is higher than the price at the market equilibrium by $30. 
B)the price level when the outcome is efficient is lower than the price at the market equilibrium by $10. 
C)the price level when the outcome is efficient is lower than the price at the market equilibrium by $40. 
D)the price level when the outcome is efficient is higher than the price at the market equilibrium by $20.

Use the Following Figure to Answer the Question : Figure