Consider the market for hamburgers in an economy where the market equilibrium is characterized by a quantity of hamburgers of 50 million and a price of $5.00 per hamburger. Suppose that currently 50 million hamburgers are being produced and sold at a price of $5.00. This outcome in the market for hamburgers is economically because: Some hamburgers produced incur opportunity costs of production that exceed their value or marginal benefit to consumers. The opportunity cost of producing the last hamburger equals the marginal benefit of consumption. Some hamburgers that are valued more highly by consumers than their opportunity cost of production are not being produced and sold

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Business

Damion Garner

11 September, 08:48

Consider the market for hamburgers in an economy where the market equilibrium is characterized by a quantity of hamburgers of 50 million and a price of $5.00 per hamburger. Suppose that currently 50 million hamburgers are being produced and sold at a price of $5.00. This outcome in the market for hamburgers is economically because: Some hamburgers produced incur opportunity costs of production that exceed their value or marginal benefit to consumers. The opportunity cost of producing the last hamburger equals the marginal benefit of consumption. Some hamburgers that are valued more highly by consumers than their opportunity cost of production are not being produced and sold

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Koen Galvan · Answer 1

The correct answer is: the opportunity cost of producing the last hamburger equals the marginal benefit of consumption.

Explanation:

The equilibrium quantity of hamburgers is 50 million.

The equilibrium price of each unit of hamburgers is $5.

The economy is producing at 50 million output and $5 price.

This implies that the economy is in equilibrium. At equilibrium, the cost of producing will be equal to benefit. Thus we can say that the economy is producing at efficient level.

In case the cost is higher than the marginal benefit, it implies that production is inefficient.