1. Suppose that the following discrete numbers show the integer values of MWTP and MC as depicted in Figure 4.1. Determine the socially efficient rate of output. Show that at any other output level, the net benefits to society will be lower than they are at the efficient level. (Remember, the marginal cost of increasing output from 4 to 5 units is $9, which is also the amount by which cost decreases in going from 5 to 4 units.) 78 Section Two Analytical Tools Output 1 2 3 4 7 8 10 MWTP 20 18 16 14 12 10 8 6. 4 MC 5 7 8 9. 11 15 21 30 40 9, 6

1. Suppose that the following discrete numbers show the integer values of MWTP and MC as depicted in Figure 4.1. Determine the socially efficient rate of output. Show that at any other output level, the net benefits to society will be lower than they are at the efficient level. (Remember, the marginal cost of increasing output from 4 to 5 units is $9, which is also the amount by which cost decreases in going from 5 to 4 units.) 78 Section Two Analytical Tools Output 1 2 3 4 7 8 10 MWTP 20 18 16 14 12 10 8 6. 4 MC 5 7 8 9. 11 15 21 30 40 9, 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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