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Figure: Efficient Market Outcome
-(Figure: Efficient Market Outcome) Refer to the figure. Which point represents the efficient equilibrium?
A) A
B) B
C) C
D) None of the answers is correct.

Question

Use the following to answer questions:
Figure: Efficient Market Outcome 
-(Figure: Efficient Market Outcome) Refer to the figure. Which point represents the efficient equilibrium?
A) A 
B) B 
C) C 
D) None of the answers is correct.

Quizplus · Accepted Answer

Point C represents the efficient equilibrium because it is where the marginal benefit of consuming the good equals the marginal cost of producing it, and there is no deadweight loss. Points A and B represent inefficient outcomes with deadweight loss.

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