Social Marginal Cost Social Marginal Benefit Quantity Q1 Q2 Q3 Suppose the graph above represents the market for a good with a negative externality. If the private market is left to allocate the good, quantity will be exchanged. The socially optimal quantity is O Q1; Q2. Q3; Q2. O Q2; Q3. Q2; Q1.

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A: a) Following is the graph:

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A: Given  MCA=50+3QA  MCB=20+6QB (MARGINAL BENIFIT) MB=590-3Qtot  QA and QB are the quantities of…

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A:

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A: MCE1 = 4E1 +4 MCE2 = 4/3E2 +4/3 MSB = 10-E E = E1 +E2

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