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redwalrus511Lv1
28 Sep 2019
A price support leads to inefficiency because
1 output is more than the efficient, equilibrium quantity.
2 the marginal benefit of the last unit produced is larger than the marginal cost.
3 the price charged is less than the equilibrium price.
4 producer surplus is less than consumer surplus.
5 producers must pay a subsidy to the government.
And why, thanks
A price support leads to inefficiency because
1 output is more than the efficient, equilibrium quantity.
2 the marginal benefit of the last unit produced is larger than the marginal cost.
3 the price charged is less than the equilibrium price.
4 producer surplus is less than consumer surplus.
5 producers must pay a subsidy to the government.
And why, thanks
Darryn D'SouzaLv10
28 Sep 2019
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