steel foundry emits fumes that lead to a marked reduction in air quality for local inhabitants. a) Draw a diagram to show that at the foundry’s profit maximising output marginal social cost exceeds marginal private cost.

steel foundry emits fumes that lead to a marked reduction in air quality for local inhabitants. a) Draw a diagram to show that at the foundry’s profit maximising output marginal social cost exceeds marginal private cost.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 7SQ

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Question

A steel foundry emits fumes that lead to a marked reduction in air quality for local
inhabitants.

a) Draw a diagram to show that at the foundry’s profit maximising output marginal
social cost exceeds marginal private cost.

Definition Definition Total cost incurred by the producers of goods and services as well as anyone who is impacted by the production of the commodity in terms of external cost.

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