Question

Assume that the socially efficient output level in the residential solar panel market is 1,000 units per week, but the industry is only producing 800 units per week at current capacity. The industry’s under-production is causing.

Answer 1

The industry’s under-production is causing society will be deprived of a net gain since the next panel that is produced will have a higher consumer value than the expenses of producing it.

This is further explained below.

What is the industry?

Generally, An industry is a sector of an economy that generates a group of closely linked raw materials, commodities, or services, according to the macroeconomics definition of the term.

One may, for instance, make reference to the insurance sector or the timber industry.

In conclusion, Due to the fact that the industry is manufacturing fewer panels than it should be, society will be deprived of a net benefit.

This is because the consumer value of the next panel that is manufactured will be greater than the costs associated with making it.

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