A community's marginal utility and total cost schedules for wooden chairs are as follows (all units in thousands):

Marginal Total Chairs Utility Cost

1 $10 $2

2 9 5

3 8 9

4 7 14

5 6 20

6 5 27

7 4 35

8 3 44

9 2 54

a) What is the efficient level of output?

b) What are the supply and demand schedules for chairs, and the equilibrium output and price?

c) Explain why the free market does or does not achieve the efficient level of output.