The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000th gallon of gasoline entails the following:
- a private cost of $3.10; a social cost of $3.55;
- a value to consumers of $3.70.
Let QMARKET represent the equilibrium quantity of gasoline, and let QOPTIMUM represent the socially optimal quantity of gasoline. Which of the following inequalities is correct?
A. QMARKET < 1,000 < QOPTIMUM
B. QOPTIMUM < 1,000 < QMARKET
C. QOPTIMUM < QMARKET < 1,000
D. 1,000 < QOPTIMUM < QMARKET