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2: Question Content AreaAutomobile Industry Figure: A graph shows two parallel upward sloping supply curves and a downward sloping demand curve plotting the relationship between
2: Question Content AreaAutomobile Industry Figure: A graph shows two parallel upward sloping supply curves and a downward sloping demand curve plotting the relationship between Quantity on the horizontal axis with marks at 35, 38, 42, and 58 from left to right and Price (in dollars) on the vertical axis with marks at 1.35, 1.5, 1.6, 1.7, 1.8, and 1.9 from bottom to top. The first supply curve labeled Supply social cost (Private plus external costs) curve starts from the point between 1.6 and 1.7 near the vertical axis, passes through the point (35, 1.8), and ends at the top right. The second supply curve labeled Supply (Private costs) curve is to the right of the first curve and starts from point 1.35 near the vertical axis, passes through the point (42, 1.6), and ends at the right below the first curve. The demand (D) curve starts from the top left, intersects the first supply curve at the point (35, 1.8), the second supply curve at the point (42, 1.6), passes through the point (58, 1.35), and ends at the bottom right near the horizontal axis. Horizontal and vertical drop lines extend from the points (35, 1.8), (38, 1.9), (42, 1.6), and (58, 1.35). Refer to the figure. This graph represents the automobile industry. Without government intervention, the equilibrium quantity is ______. The socially optimal quantity is ______. a. 42 units; 38 units b. 42 units; 35 units c. 38 units; 35 units d. 35 units; 42 units
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