Economics 9708 · AS & A Level · 7.4

7.4 — practice question

The diagram illustrates the cost and benefit curves for a good in a free market. Which combination is correct?

  • Aactual output level: P1Q1; social optimal level of output: P3Q3
  • Bactual output level: P2Q2; social optimal level of output: P3Q3
  • Cactual output level: P2Q2; social optimal level of output: P4Q4
  • Dactual output level: P3Q3; social optimal level of output: P4Q4

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