Exhibit 17-1
-In Exhibit 17-1,the amount by which the total social cost of producing the private equilibrium level of output exceeds the total social benefit is
A)$300
B)$50
C)$5,000
D)$1,600
E)$8,000

Question

Exhibit 17-1 
-In Exhibit 17-1,the amount by which the total social cost of producing the private equilibrium level of output exceeds the total social benefit is
A)$300 
B)$50 
C)$5,000 
D)$1,600 
E)$8,000

Quizplus · Accepted Answer

The social cost at the private equilibrium level of output is $4,000 while the social benefit is only $2,400. This means there is a gap of $1,600 ($4,000 - $2,400) between them. Option D is the only answer choice that matches this value.

Exhibit 17-1 -In Exhibit 17-1,the Amount by Which the Total Social Cost