Suppose the Market-Equilibrium Quantity of Good X Is 5,000 Units

question 490

Multiple Choice

Suppose the market-equilibrium quantity of good x is 5,000 units and the socially-optimal quantity of good x is 4,000 units. Then

• A)the production of good x imposes external costs on society.
• B)the private value of good x exceeds the private cost of good x when 5,000 units are produced.
• C)the private cost of good x exceeds the private value of good x when 5,000 units are produced.
• D)the social cost of good x exceeds the private value of good x when 4,000 units are produced.