Use the following to answer question 121:
Figure: Model of a Market for a Common Resource
-(Figure: Model of a Market for a Common Resource)Use Figure: Model of a Market for a Common Resource.The figure shows the intersection of the private supply and demand curves.Without any consideration of the marginal social cost of using a common resource,the quantity of the common resource used at Q will be:
A) larger than is socially desirable.
B) smaller than is socially desirable.
C) efficient.
D) indeterminate without more information.

Question

Use the following to answer question 121:
Figure: Model of a Market for a Common Resource 
-(Figure: Model of a Market for a Common Resource)Use Figure: Model of a Market for a Common Resource.The figure shows the intersection of the private supply and demand curves.Without any consideration of the marginal social cost of using a common resource,the quantity of the common resource used at Q will be:
A) larger than is socially desirable. 
B) smaller than is socially desirable. 
C) efficient. 
D) indeterminate without more information.

Quizplus · Accepted Answer

Without considering the marginal social cost of using the common resource, the quantity used (represented by point Q) will only be determined by the intersection of private supply and demand curves. This may result in a larger quantity being used than is socially desirable, leading to negative externalities and inefficiencies in resource allocation. Therefore, the correct answer is A.

Use the Following to Answer Question 121