Multiple Choice
Figure 4-4 
-Refer to Figure 4-4.The figure above represents the market for iced tea.Assume that this is a competitive market.At an output of 10,000 units
A) the marginal cost of iced tea is greater than the marginal benefit; therefore,output is inefficiently low.
B) producers should lower the price to $1 in order to sell the quantity demanded of 10,000.
C) the marginal benefit of iced tea is greater than the marginal cost; therefore,output is inefficiently low.
D) the marginal benefit of iced tea is greater than the marginal cost; therefore,output is inefficiently high.
Correct Answer:
Verified
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