Author Question: The figure above shows the market for coffee. If the government pays the coffee producers a subsidy ... (Read 181 times)

NClaborn · **on:** Jun 29, 2018

The figure above shows the market for coffee. If the government pays the coffee producers a subsidy and production increases to 30 million pounds per day, the market is

A) efficient because the marginal social benefit from the last pound of coffee exceeds its marginal social cost.
B) efficient because the total social benefit from coffee exceed the total social cost.
C) inefficient because the marginal social benefit from the last pound of coffee exceeds its marginal social cost.
D) inefficient because the marginal social cost of the last pound of coffee exceeds its marginal social benefit.

Question 2

Giuseppe's Pizza is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price is 15, what is Giuseppe's profit-maximizing output?

A) 2 pizzas per hour
B) 3 pizzas per hour
C) 4 pizzas per hour
D) 0 pizzas per hour