The figure presents the graph of three curves in the first q…
Questions
The figure presents the grаph оf three curves in the first quаdrаnt оf a cоordinate plane. The horizontal axis is labeled Quantity, and the numbers 90, 100, and 110 are indicated, with vertical grid lines extending up from each. The vertical axis is labeled Price, and the values $8 through $14, in increments of $2, are indicated, with horizontal grid lines extending to the right from each. The three curves are labeled S equals M S C, D equals M P B, and D prime equals M S B. Curve S equals M S C begins below price $8, and to the right of the vertical axis, and moves upward and to the right in a straight line. It passes through the points with coordinates 90 comma $8, 100 comma $10, and 110 comma $12. It ends to the right of quantity 110, and at a price of approximately $14. Curve D equals M P B begins just above price $14, and to the right of the vertical axis, and moves downward and to the right in a straight line. It passes through the point with coordinates 90 comma $12, intersects curve S equals M S C at the point with the coordinates 100 comma $10, and passes through the point with coordinates 110 comma $8. It ends to the right of quantity 110, and below price $8. Curve D prime equals M S B begins above price $14, and just to the left of quantity 90. It moves downward and to the right in a straight line, and is parallel to curve D equals M P B. It passes through the point with coordinates 100 comma $12, and intersects curve S equals M S C at the point with the coordinates 110 comma $12. It ends to the right of quantity 110, and at a price of approximately $10. The graph above depicts the marginal private benefit (MPB) , the marginal social benefit (MSB) , and the marginal social cost (MSC) of producing a good. Which of the following correctly identifies both the problem illustrated in the graph and the remedy to the problem?
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