Table 10-2 the Following Table Shows the Private Value, Private Cost, and Cost

question 454

Multiple Choice

Table 10-2
The following table shows the private value, private cost, and social value for a market with a positive externality.
-Refer to Table 10-2. What is the socially-optimal level of output in this market?

• A)3 units
• B)4 units
• C)5 units
• D)6 units

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Definitions:

Indistinguishable

Unable to be identified as different or distinct when compared to another.

Average Revenue

The amount of money a firm earns per unit of output sold, calculated by dividing total revenue by the quantity sold.

Marginal Cost

The increase or decrease in the total cost that arises when the quantity produced is incremented by one unit.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total quantity produced.