The supply and demand conditions facing a firm that makes refrigerators and generates a negative externality by dumping a highly toxic deposits into a nearby river is given in the table below. The equilibrium price and quantity when private costs and social costs are taken into account are Internalizing A Negative Externality 100 80 65 55 30 20 Price ● Price = $65, Quantity = 40 Price = $30, Quantity = 20 Price = $40, Quantity = 55 Price = $55, Quantity = 30 0 10 40 55 80 100 Quantity Demanded Quantity Supplied without Paying Social Costs 120 100 90 85 80 &__________ respectfully. 65 Quantity Supplied after Paying Socia Costs 75 50 40 30 20 15
The supply and demand conditions facing a firm that makes refrigerators and generates a negative externality by dumping a highly toxic deposits into a nearby river is given in the table below. The equilibrium price and quantity when private costs and social costs are taken into account are Internalizing A Negative Externality 100 80 65 55 30 20 Price ● Price = $65, Quantity = 40 Price = $30, Quantity = 20 Price = $40, Quantity = 55 Price = $55, Quantity = 30 0 10 40 55 80 100 Quantity Demanded Quantity Supplied without Paying Social Costs 120 100 90 85 80 &__________ respectfully. 65 Quantity Supplied after Paying Socia Costs 75 50 40 30 20 15
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 8QP
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Transcribed Image Text:The supply and demand conditions facing a firm that makes refrigerators and generates a negative externality by dumping a highly toxic deposits into a nearby
river is given in the table below.
The equilibrium price and quantity when private costs and social costs are taken into account are
Internalizing A Negative Externality
100
80
65
55
30
20
Price
Price = $65, Quantity = 40
Price = $30, Quantity = 20
Price = $40, Quantity = 55
Price = $55, Quantity = 30
O
10
40
55
80
100
Quantity Demanded
Quantity Supplied without Paying
Social Costs
120
100
90
85
80
& respectfully.
65
Quantity Supplied after Paying Social
Costs
75
50
40
30
20
15
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