8. Suppose a firm produces shoes. The production of shoes creates pollution, which is a negative externality. This is shown in the graph below. Price - Marginal Social Cost D'C В Marginal Private Cost A Demand (Marginal Value/Benefit) 80 100 Quantity What quantity (80 or 100) would be produced if the externality is not taken into account? Briefly explain. а.
8. Suppose a firm produces shoes. The production of shoes creates pollution, which is a negative externality. This is shown in the graph below. Price - Marginal Social Cost D'C В Marginal Private Cost A Demand (Marginal Value/Benefit) 80 100 Quantity What quantity (80 or 100) would be produced if the externality is not taken into account? Briefly explain. а.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 41P: Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once...
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