Consider the production and sale of Good B.        Suppose that the “Social Value” of each unit of Good B is greater than the “Willingness  to Pay” of the individual who consumes that unit. There are NO externalities associated with the production or consumption of Good B, and Good B is sold in a  competitive market. Suppose that the “Efficient” level of output for Good B is 400,000 units. Is the market equilibrium level of output greater than 400,000, less than 400,000, or equal to 400,000 ( just circle your answer; you don’t have to explain)?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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  1. Consider the production and sale of Good B.

       Suppose that the “Social Value” of each unit of Good B is greater than the “Willingness  to Pay” of the individual who consumes that unit. There are NO externalities associated with the production or consumption of Good B, and Good B is sold in a  competitive market.

Suppose that the “Efficient” level of output for Good B is 400,000 units.

Is the market equilibrium level of output greater than 400,000, less than 400,000, or equal to 400,000 ( just circle your answer; you don’t have to explain)?   

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