Use the Following Figure to Answer the Question : Figure

question 3

Multiple Choice

Use the following figure to answer the question : Figure 20-1 : D₁ and S₁ are the private demand and supply curves,of a commodity produced by a competitive firm.S₂ reflects the social marginal cost of production,while S₀ represents the external marginal cost.
-From Figure 20-1,we can infer that the efficient output is:

• A)900 units.
• B)500 units.
• C)400 units.
• D)600 units.

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Definitions:

Revenue

The total amount of money generated by a company from its business activities, such as sales of goods or services, before any expenses are subtracted.

Price Inelastic

Describes a situation where the demand for a product does not change significantly when its price changes.

Tax Revenue

The financial earnings governments receive via taxing.

Perfectly Price Inelastic

A situation where the quantity demanded of a good or service does not change in response to a change in price.