Using the following graph, an increase in output from 120 units to 160 units would $24 $22 $20 $18 $16 Price $14- $12- $10- $8 $6 $4 $2- Supply (private cost and external cost) 20 40 60 80 100 120 140 160 180 200 be an action of which a benevolent social planner would approve. increase total economic well-being. increase the external cost per unit of output. O move the market from a socially efficient outcome to a socially inefficient outcome. -Supply (private cost) Demand (private value) -Quantity
Using the following graph, an increase in output from 120 units to 160 units would $24 $22 $20 $18 $16 Price $14- $12- $10- $8 $6 $4 $2- Supply (private cost and external cost) 20 40 60 80 100 120 140 160 180 200 be an action of which a benevolent social planner would approve. increase total economic well-being. increase the external cost per unit of output. O move the market from a socially efficient outcome to a socially inefficient outcome. -Supply (private cost) Demand (private value) -Quantity
Chapter17: Externalities And The Environment
Section: Chapter Questions
Problem 2.5P
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