Asked by
Meera Ghunaim
on Dec 11, 2024
Verified
Suppose external benefits are present in a market which results in the actual market price of $49 and market output of 800 units. How does this outcome compare to the efficient, ideal equilibrium?
A) The efficient price would be higher than $49.
B) The efficient price would be lower than $49.
C) The efficient price would also be $49.
D) The efficient output would be less than 800 units.
External Benefits
Positive effects experienced by those not directly involved in an economic transaction.
Efficient Equilibrium
A state in which resources are allocated in the most efficient manner, leaving no potential for reallocating resources to make someone better off without making someone else worse off.
- Recognize the impact of external costs and benefits on the efficiency of markets.
- Examine the reaction of markets to external stimuli and their influence on ideal production quantities.
Verified Answer
SH
Learning Objectives
- Recognize the impact of external costs and benefits on the efficiency of markets.
- Examine the reaction of markets to external stimuli and their influence on ideal production quantities.
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