Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply

question 122

Multiple Choice

Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000^th gallon of gasoline entails the following:
• a private cost of $3.10;
• a social cost of $3.55;
• a value to consumers of $3.70.
-Refer to Scenario 10-1. Let Q_MARKET represent the equilibrium quantity of gasoline, and let Q_OPTIMUM represent the socially optimal quantity of gasoline. Which of the following inequalities is correct?

• A)1,000 < Q_OPTIMUM < Q_MARKET
• B)Q_OPTIMUM < 1,000 < Q_MARKET
• C)Q_MARKET < 1,000 < Q_OPTIMUM
• D)Q_OPTIMUM < Q_MARKET < 1,000

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Definitions:

Thirty-Four

The numeral 34, representing a quantity or sequence; it does not have a specific definition outside of its numeric value.

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The number following fifteen and preceding seventeen, often denoting a specific quantity in a sequence.

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