3. A)Priceand CostAQ, 02QuantityAnalyzing the prior graph which type of externality is this? Which line is the private and which is thepublic? What quantity does the private market produce, which quantity does the public want? Nowgive three (3) examples of this type of externality.--

Curve X is the private demand curve. Curve Y is the marginal social benefit (MSB) or public demand…

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Economics

type of externality

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 1QR

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Concept explainers

Market Failure Analysis

To understand Market failure, we need to first understand welfare economics. An Italian economist, Vilfredo Pareto stated that allocation of resources in an efficient manner such that an economic change, which harms no one and makes someone better off, indicates an increase in social welfare. It is also called Pareto Optimality, where resources cannot further be reallocated without harming one. This does not apply to those economic changes, which harm some and benefit others. social welfare increases if the utility of any of its members' increases and none decrease in the economy.

Question

3. A)
Price
and Cost
A
Q, 02
Quantity
Analyzing the prior graph which type of externality is this? Which line is the private and which is the
public? What quantity does the private market produce, which quantity does the public want? Now
give three (3) examples of this type of externality.
--

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