Table 10-1 the Following Table Shows the Private Value, Private Cost, and Cost

question 165

Multiple Choice

Table 10-1
The following table shows the private value, private cost, and external cost for various quantities of output in a market.
-Refer to Table 10-1. What is the socially-optimal quantity of output in this market?

• A)1 unit
• B)2 units
• C)3 units
• D)4 units

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Definitions:

Production Function

A mathematical relationship expressing the amount of output produced as a function of the quantities of various inputs.

Isocost Equation

An equation that represents all combinations of goods that can be purchased given a fixed cost and the prices of goods.

Input Mix

The combination of various types of inputs used in the production process.

Memo Pads

Stationery items consisting of small sheets of paper for brief notes, reminders, or messages.