The figure above shows the market for pizza.
-In the figure above,if pizza production increases to 15,000 pizzas a day,then marginal benefit ________ marginal cost,and ________ occurs.

Question

Quizplus · Accepted Answer

If pizza production increases to 15,000 pizzas, the new equilibrium quantity would be above the optimal quantity since marginal cost would exceed marginal benefit. This results in an overproduction of pizzas. Thus, the correct answer is C since marginal benefit is below marginal cost and overproduction occurs.

The Figure Above Shows the Market for Pizza