Figure 11.1
-Refer to Figure 11.1.The figure above represents the market for pecans.Assume that this is a competitive market.At a price of $3,

Question

Figure 11.1 
-Refer to Figure 11.1.The figure above represents the market for pecans.Assume that this is a competitive market.At a price of $3,

Quizplus · Accepted Answer

At a price of $3, the quantity demanded of pecans is 8,000 and the quantity supplied is 4,000. This implies that there is underproduction of pecans, and the market is inefficiently low. The marginal benefit of pecans at this price is higher than the marginal cost, indicating that consumers are willing to pay more for the pecans than it costs to produce them. Therefore, increasing the output of pecans to the point where the marginal cost equals the marginal benefit would result in a more efficient allocation of resources.

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