Figure 4-4
-Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.At a price of $3

Question

Figure 4-4 
-Refer to Figure 4-4.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 supplied is only 8,000 while the quantity demanded is 12,000. This shows that the market is not producing enough pecans to satisfy consumer demand, indicating that output is inefficiently low. This is because the marginal benefit that consumers receive from consuming additional pecans is greater than the marginal cost of producing these pecans. As a result, producers should increase their output by producing more pecans to meet consumer demand.

Figure 4-4 -Refer to Figure 4-4.The Figure Above Represents the Market for the Market