Question 50

The folowing table shows the private value, private cost, and external cost for various quantities of output in a market.

QuantityPrivateValuePrivate CostExternalCost

1$14$10$4

2$13$11$4

3$12$12$4

4$11$13$4

5$10$14$4

6$9$15$4

7$8$16$4

What is the socially optimal quantity of output in this market?

a.1 unit.

b.3 units.

c.2 units.

d.4 units.