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

question 138

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. Suppose the equilibrium quantity of gasoline is 1,150 gallons; that is, Q_MARKET = 1,150. Then the equilibrium price of a gallon could be

• A)$2.80.
• B)$3.00.
• C)$3.30.
• D)$3.80.

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