Is the external marginal cost added to the supply curve or subtracted? a) it is subtracted from the supply curve, which shifts the supply curve outwards and to the right b) it is added to the supply curve which shifts the supply curve upwards and to the left.
Is the external marginal cost added to the supply curve or subtracted? a) it is subtracted from the supply curve, which shifts the supply curve outwards and to the right b) it is added to the supply curve which shifts the supply curve upwards and to the left.
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 5PA: The many identical residents of Whoville love drinking Zlurp. Each resident has the following...
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Is the external marginal cost added to the supply curve or subtracted?
a) it is subtracted from the supply curve, which shifts the supply curve outwards and to the right
b) it is added to the supply curve which shifts the supply curve upwards and to the left.
Expert Solution
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External marginal cost (XMC) is the cost borne by the third party from the consumption or production of one extra unit of a product.
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