Answered

Westonci.ca makes finding answers easy, with a community of experts ready to provide you with the information you seek. Join our platform to connect with experts ready to provide detailed answers to your questions in various areas. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 200th gallon of gasoline entails the following:
• a private cost of $3.03;
• a social cost of $3.23;
• a value to consumers of $3.39.
Refer to Scenario 10-1. Suppose the equilibrium quantity of gasoline is 220 gallons; that is, Q MARKET = 220. Then the equilibrium price of a gallon could be:________
a. $3.08.
b.$2.77.
c. $2.45.
d. $3.69.

Sagot :

abiolataiwo2015

Answer:

a. $3.08

Explanation:

Calculation to determine what the equilibrium price of a gallon could be:

Based on the information given the Private cost is $3.03 while the Social cost is $3.23 which indicates that Social cost lies ABOVE the private cost and since The MARKET EQUILIBRIUM tend to occurs when Private value=Private cost which means that the EQUILIBRIUM PRICE lies between $3.03 and $3.23, Therefore the EQUILIBRIUM PRICE of a gallon would be $3.08 because it lies between $3.03 and $3.23.

We appreciate your time on our site. Don't hesitate to return whenever you have more questions or need further clarification. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.