Figure 16-1
-Refer to Figure 16-1.What is the economically efficient output level?
A)Q1 units
B)Q2 units
C)Q3 units
D)Q4 units

Question

Figure 16-1 
-Refer to Figure 16-1.What is the economically efficient output level?
A)Q1 units 
B)Q2 units 
C)Q3 units 
D)Q4 units

Quizplus · Accepted Answer

The economically efficient output level is Q3 units because it is the output level where the marginal cost (MC) curve intersects the marginal benefit (MB) curve. At this output level, the social benefit of producing an additional unit of output is equal to the social cost of producing that unit.

Figure 16-1 -Refer to Figure 16-1.What Is the Economically Efficient Output Level