Refer to Figure 4-3. At the price P2, consumers are willing to buy the Q2 pounds of granola. Is this an economically efficient quantity?
A) Yes, because the price P2 shows what consumers are willing to pay for the product.
B) No, the marginal benefit of the last unit (Q2 ) exceeds the marginal cost of that last unit.
C) Yes, otherwise consumers would not buy Q2 units.
D) No, the marginal cost of the last unit (Q2 ) exceeds the marginal benefit of the last unit.
B
You might also like to view...
The price elasticity of supply of laptop computers equals 1.5 if
A) a rightward shift of the demand curve for laptops causes the quantity supplied to increase by 1.5 percent. B) a rightward shift of the demand curve for laptops causes a 1.5 percent increase in their price. C) for every 1 percent that laptop prices increase, computer makers produce another 1.5 percent laptops. D) for every $1.00 that laptops increase in price, computer makers produce another 150 laptops.
Rent control is an example of a price floor
Indicate whether the statement is true or false