The figure shows the graph of three curves in the first quad…
Questions
The figure shоws the grаph оf three curves in the first quаdrаnt оf a coordinate plane. The horizontal axis is labeled “Quantity,” and the vertical axis is labeled “Price comma Cost.” The quantities Q sub 1 and Q sub 2 are indicated from left to right on the horizontal axis. Q sub 1 is located about one third of the way along the horizontal axis. Q sub 2 is located about halfway along the horizontal axis. The three curves are labeled M P B, M S B, and M S C equals M P C. All three curves begin to the left of Q sub 1 at approximately the same distance, but at different heights. Curve M P B begins just over halfway up the vertical axis, moves downward and to the right in a straight line until it ends at a point that is to the right of Q sub 2 and just above the horizontal axis. Curve M S B begins almost directly above the point where curve M P B begins, near the top of the vertical axis, and moves downward and to the right in a straight line. Curve M S B is parallel to curve M P B, and ends above and to the right of the end point of curve M P B. Curve M S C equals M P C begins almost directly below the starting point of line M P B, about one fourth of the way up the vertical axis. It moves upward and to the right in a straight line, intersects curve M P B at Q sub 1, then intersects curve M S B at Q sub 2, and ends to the right of Q sub 2, high above the end point of curve M S B. A vertical grid line is drawn upward from the horizontal axis at Q sub 1, which passes through the intersection of curves M P B and M S C equals M P C, and ends at a point on curve M S B. Another vertical grid line is drawn upward from the horizontal axis at Q sub 2, which passes through curve M P B, and ends at the intersection of curves M S B and M S C equals M P C. Three regions are located between the two vertical grid lines and are created by the three graphed curves passing through the grid lines. From top to bottom, the regions are labeled A, B, and C. Region A is a triangle, which is located between the vertical grid lines at Q sub 1 and Q sub 2, below curve M S B, and above curve M S C equals M P C. Region B is a triangle, which is located between the vertical grid lines at Q sub 1 and Q sub 2, below curve M S C equals M P C, and above curve M P B. Region C is a trapezoid, which is located between the vertical grid lines at Q sub 1 and Q sub 2, below curve M P B, and above the horizontal axis. The diagram provided illustrates the marginal private benefit (MPB) , marginal social benefit (MSB), marginal private cost (MPC) , and marginal social cost (MSC) measured in dollars for a competitive market.Assume that the goal of the government is to increase efficiency in the market. The cost of a government intervention that increases market output from Q1 to Q2 is $1.2 million. The intervention will definitely improve market efficiency if the area of