Figure 12-13
-Refer to Figure 12-13.If the market price is P₁,what is the allocatively efficient output level?

Question

Figure 12-13 -Refer to Figure 12-13.If the market price is P₁,what is the allocatively efficient output level?

Quizplus · Accepted Answer

The allocatively efficient output level occurs where the marginal cost (MC) equals the market price (P). In the graph, this occurs at output level Q₁. At this output level, the firm is producing where the marginal cost equals the marginal benefit to society, maximizing social welfare. Therefore, the best choice is B.

Figure 12-13 -Refer to Figure 12-13.If the Market Price Is P1,what Is

Figure 12-13 -Refer to Figure 12-13.If the Market Price Is P₁,what Is