Multiple Choice
In the figure given below,D1 and S1 are the private demand and supply curves,of a commodity produced by a competitive firm.S2 reflects the social marginal cost of production,while S0 represents the external marginal cost. 
-Refer to Figure 20-1.A comparison between the efficient outcome and the market equilibrium reveals that:
A) the price level when the outcome is efficient is higher than the price at the market equilibrium by $30.
B) the price level when the outcome is efficient is lower than the price at the market equilibrium by $10.
C) the price level when the outcome is efficient is lower than the price at the market equilibrium by $40.
D) the price level when the outcome is efficient is higher than the price at the market equilibrium by $20.
Correct Answer:

Verified
Correct Answer:
Verified
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