Following graph is of the refined petroleum market we have considered in class (MEC is the marginal external cost to recreational users; Mл is the marginal profit of the refinery). $ per barrel A B D 0 MEC 0 of barrels) QE Q (thousands Μπ Identify the economic interpretations of each of the labeled areas, A, B, C, and D, by matching each labeled area to one of the following four options: (i) Total amount of environmental damage associated with producing the efficient output level; (ii) (iii) (iv) The net gain accruing to recreational users by getting the refineries to reduce output from the competitive level to the efficient level; Loss of profit for petroleum refiners from reducing output from the competitive to the efficient level; Net gain accruing to petroleum refineries of producing at the efficient level. A B D

Following graph is of the refined petroleum market we have considered in class (MEC is the marginal external cost to recreational users; Mл is the marginal profit of the refinery). $ per barrel A B D 0 MEC 0 of barrels) QE Q (thousands Μπ Identify the economic interpretations of each of the labeled areas, A, B, C, and D, by matching each labeled area to one of the following four options: (i) Total amount of environmental damage associated with producing the efficient output level; (ii) (iii) (iv) The net gain accruing to recreational users by getting the refineries to reduce output from the competitive level to the efficient level; Loss of profit for petroleum refiners from reducing output from the competitive to the efficient level; Net gain accruing to petroleum refineries of producing at the efficient level. A B D

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 6SQP

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