Question: A graph with price on the vertical axis and quantity on the horizontal axis. There is an upward sloping supply curve that intersects with a

A graph with price on the vertical axis and quantity on the horizontal axis. There is an upward sloping supply curve that intersects with a downward sloping demand curve. The curves cross where the price is $2 and the quantity demanded and the quantity supplied are 20000 units. At a price of $1 the quantity demanded is 30000 units and the quantity supplied is 10000 units. When the price is $3 the quantity demanded and supplied are 10000 and 30000, respectively.
The graph above shows the market for lemonade. At a price of $3
Group of answer choices
the marginal cost of lemonade is greater than the marginal benefit; therefore, output is inefficiently low.
the marginal benefit of lemonade is greater than the marginal cost; therefore, output is inefficiently low.
the marginal benefit of lemonade is greater than the marginal cost; therefore, output is inefficiently high.
producers should lower the price to $1 in order to sell the quantity demanded of 10,000.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!