The graph shows the market for North Atlantic tuna. The quantity of tuna caught
ID: 1162159 • Letter: T
Question
The graph shows the market for North Atlantic tuna. The quantity of tuna caught is tons a month and the price of tuna is sa ton. The tuna stock is being used O A. efficiently, marginal social benefit equals marginal social cost O B. efficiently; marginal private cost equals marginal social benefit O C. inefficiently and overfishing is occurring: the quantity produced is less than the quantity at which because at the equilibrium quantity marginal social cost equals marginal social benefit inefficiently and overfishing is occurring: marginal social benefit exceeds marginal social cost D. OE. inefficien tly and overfishing is occurring: marginal social cost exceeds marginal social benefit When the tuna stock is used efficiently, the price of tuna is s l a ton.Explanation / Answer
The quantity of Tuna caught is where MSB =MC i.e 80 tons per month and the price of tuna is $100 per ton.
The Tuna stock is being used inefficiently and overfishing is occuring because marginal social cost exceeds marginal social benefit.
When the Tuna stock is used efficiently , it occurs when MSB=MSC , then the price of tuna is $150 per ton and quantity is 40 tons per month.
Related Questions
Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.