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Question
Refer to the accompanying table, where Q represents the quantity produced, internal cost and external cost are given for various quantities, and P represents the price consumers are willing to pay for various quantities to answer the following questions.
| Q | Internal Cost | External Cost | P |
| 1 | $2 | $4 | $14 |
| 2 | $4 | $4 | $12 |
| 3 | $6 | $4 | $10 |
| 4 | $8 | $4 | $8 |
| 5 | $10 | $4 | $6 |
| 6 | $12 | $4 | $4 |
The social optimum occurs where price is ________ and quantity is ________.
a. $4; 6
b. $8; 4
c. $10; 3
d. $10; 5
e. $12; 6
Answer
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