1. Using marginal analysis to find the optimal quantity of a good The following graph shows the marginal benefit (MB) and marginal cost (MC) curves for Barbie dolls in an economy. A graph depicting the relationship between quantity and price of Barbie dolls. The horizontal axis ranges from 0 to 20 and is labeled Quantity (Millions of Barbie dolls per year) and the vertical axis ranges from 0 to 30 and is labeled Price (Dollars per Barbie doll). A downward-sloping Marginal Benefit curve intersects with an upward-sloping Marginal Cost curve at the point (10, 15). 0 5 10 15 20 30 27 24 21 18 15 12 9 6 3 0 PRICE (Dollars per Barbie doll) QUANTITY (Millions of Barbie dolls per year) Marginal Benefit Marginal Cost If 4 million Barbie dolls are sold, , which means that: The production of Barbie dolls is currently at the efficient level. The production of Barbie dolls is currently at an inefficient level, and to reach efficiency less should be produced. From the data given it is impossible to tell if Barbie dolls are being produced at the efficient level. The production of Barbie dolls is currently at an inefficient level, and to reach efficiency more should be produced. If 16 million Barbie dolls are sold, , which means that: The production of Barbie dolls is currently at the efficient level. The production of Barbie dolls is currently at an inefficient level, and to reach efficiency less should be produced. From the data given it is impossible to tell if Ba