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Figure: Market Failure Use the following to answer questions: Figure: Market Failure -(Figure: Market Failure) Look at the figure Market Failure. Suppose the supply curve represents the marginal cost of providing streetlights in a neighborhood that is composed of two people, Ann and Joe. The demand curve represents the marginal benefit that Ann receives from the streetlights. Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to AC. Providing G streetlights is _____ because the marginal social benefit is _____ the marginal cost. A) efficient; equal to B) efficient; greater than C) inefficient; greater than D) inefficient; less than
-(Figure: Market Failure) Look at the figure Market Failure. Suppose the supply curve represents the marginal cost of providing streetlights in a neighborhood that is composed of two people, Ann and Joe. The demand curve represents the marginal benefit that Ann receives from the streetlights. Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to AC. Providing G streetlights is _____ because the marginal social benefit is _____ the marginal cost.


A) efficient; equal to
B) efficient; greater than
C) inefficient; greater than
D) inefficient; less than

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