Figure 4-4

-Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $3, what changes in the market would result in an economically efficient output?

Question

Figure 4-4
 
-Refer to Figure 4-4.The figure above represents the market for pecans.Assume that this is a competitive market.If the price of pecans is $3, what changes in the market would result in an economically efficient output?

Quizplus · Accepted Answer

An economically efficient output occurs when the market is in equilibrium, where the quantity demanded and quantity supplied are equal. At a price of $3, there is a surplus of pecans, so the quantity supplied exceeds the quantity demanded. To move towards equilibrium, the price would need to increase, leading to a decrease in quantity demanded and an increase in quantity supplied until the market reaches a balance. Therefore, the best choice is D, where the price would increase, the quantity demanded would decrease, and the quantity supplied would increase, resulting in an economically efficient output.

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