The graph shows the market for North Atlantic tuna Price and cost (dollars per t

Question

The graph shows the market for North Atlantic tuna Price and cost (dollars per ton) MSC The quantity of tuna that fishers catch is thousand tons a month. The price of a ton of tuna is s The tuna stock is being used because at the equilibrium quantity MC O A. inefficiently; marginal social cost exceeds marginal social benefit O B. inefficiently; marginal social benefit exceeds marginal social cost ° C. efficiently; marginal social benefit equals marginal social cost O D. efficiently; marginal private cost equals marginal social benefit When the stock of tuna is used efficiently, the price of a ton of tuna is MSB 40 80 120 Quantity (thousands of tons per month)

Explanation / Answer

Answer.)

The quantity of tuna that fishers catch is 80 thousand tons a month.

The price of a ton of tuna is $100

The tuna stock is being used INEFFICIENTLY because at the equilibrium quantity MARGINAL SOCIAL COST EXCEEDS MARGINAL SOCIAL BENEFITS.

When the stock of tuna is used efficiently, the price of a ton of tuna is $150.

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