If the Market Equilibrium Quantity Is Greater Than the Socially

question 137

Multiple Choice

If the market equilibrium quantity is greater than the socially optimal quantity, one can infer that:

• A)the private supply curve for the activity is to the left of the socially optimal supply curve.
• B)the private demand curve for the activity is below the socially optimal demand.
• C)there is a positive externality associated with this good.
• D)there is a negative externality associated with this good.

---

Definitions:

Private Fleet

A fleet of transportation vehicles owned and operated by a company for its own logistics and distribution needs.

Safety Inventory

Extra inventory held as a buffer against demand variability and supply chain disruptions to prevent stockouts.

Cycle Inventory

The portion of inventory that companies hold to facilitate smooth production and sales operations, fluctuating based on production cycle needs.

Low-Value Product

Products that have a low price point or perceived economic value to the consumer, often resulting in slim profit margins.