Which area best represents the inefficiency associated with this level of production?

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter13: Positive Externalities And Public Goods
Section: Chapter Questions
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consider the following graph of the marginal benefits (MB) and marginal costs (MC) of producing paper. (This is not a question about externalities). Assume fixed costs are zero. Also, these aren't damages and abatement costs.
$
MC
MB°
h
f
b
d
a
Раper
Suppose the firm produced at qa. Which area best represents the inefficiency associated with this level of production?
o a. {e}
P {f}
OC {f-b}
Od {e+c}
Transcribed Image Text:consider the following graph of the marginal benefits (MB) and marginal costs (MC) of producing paper. (This is not a question about externalities). Assume fixed costs are zero. Also, these aren't damages and abatement costs. $ MC MB° h f b d a Раper Suppose the firm produced at qa. Which area best represents the inefficiency associated with this level of production? o a. {e} P {f} OC {f-b} Od {e+c}
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