Figure 12-5 Figure 12-5 Shows Cost and Demand Curves Facing a Typical

question 270

Multiple Choice

Figure 12-5

Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 12-5.If the market price is $20, what is the firm's profit-maximizing output?

• A)750 units
• B)1,100 units
• C)1,350 units
• D)1,800 units

---

Definitions:

Marginal Social Costs

The total cost to society of producing one additional unit of a good or service, including both private costs and any externalities.

Social Welfare

The overall well-being of a society, encompassing economic, social, and environmental dimensions, often considered in policy-making.

Pollution

The entry of pollutants into the natural ecosystem resulting in harmful modifications.

External Benefit

An uncompensated benefit that an individual or firm confers on others; also known as positive externality.