Figure 10-19 -Refer to Figure 10-19. Note That the Lines Labeled "Demand

question 484

Multiple Choice

Figure 10-19
-Refer to Figure 10-19. Note that the lines labeled "Demand" and "Social Value"are parallel. Also, the slopes of the lines on the graph reflect the following facts: (1) Private value and social value decrease by $1.00 with each additional unit of the good that is consumed, and (2) private cost increases by $1.40 with each additional unit of the good that is produced. Thus, when the 74th unit of the good is produced and consumed, social well-being

• A)decreases by $2.40.
• B)decreases by $1.60.
• C)increases by $1.00.
• D)increases by $1.40.

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