the graph above shows the market for lemonade. at a price of $3, the marginal benefit of lemonade is greater…

the graph above shows the market for lemonade. at a price of $3, the marginal benefit of lemonade is greater than the marginal cost; therefore, output is inefficiently low. producers should lower the price to $1 in order to sell the quantity demanded of 10,000. the marginal benefit of lemonade is greater than the marginal cost; therefore, output is inefficiently high. the marginal cost of lemonade is greater than the marginal benefit; therefore, output is inefficiently low.

the graph above shows the market for lemonade. at a price of $3, the marginal benefit of lemonade is greater than the marginal cost; therefore, output is inefficiently low. producers should lower the price to $1 in order to sell the quantity demanded of 10,000. the marginal benefit of lemonade is greater than the marginal cost; therefore, output is inefficiently high. the marginal cost of lemonade is greater than the marginal benefit; therefore, output is inefficiently low.

Answer

Brief Explanations:

In a market, efficiency occurs when marginal benefit equals marginal cost. If marginal benefit of lemonade is greater than marginal cost, producers can increase output to gain more profit. If marginal cost is greater than marginal benefit, output is inefficiently high. Here, when marginal cost is greater than marginal benefit, output is inefficiently high.

Answer:

the marginal cost of lemonade is greater than the marginal benefit; therefore, output is inefficiently high.