-In the Above Figure,market Equilibrium at Point E Yields the Quantity

question 307

Multiple Choice

-In the above figure,market equilibrium at point E yields the quantity X.The quantity $X ^ { * }$ is the socially optimal quantity.Point E indicates that currently there is

• A)a negative externality.
• B)a positive externality.
• C)a public good.
• D)a positive externality with subsidy.

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Definitions:

Farmer

An individual engaged in agriculture, raising living organisms for food or raw materials.

Profit-Maximizing

A business strategy focused on increasing profits to the highest possible level given the firm's constraints.

Wheat

A cereal grain that is a worldwide staple food, used to make a wide range of products including bread, pasta, and cereal.

Price

The amount of money required to purchase a good or service; determined by factors such as demand, supply, and production cost.