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Price, Cost a P4 P3 P₂ P₁ 0 OD and B; Q1 Band D; Q2 Q₂ Q₁ Refer to figure above. If a negative externality exists, then the external costs associated with the negative externality equal the distance between points and the socially optimal output is A and B; Q2 A Cand B; Q2 Quantity

Price, Cost a P4 P3 P₂ P₁ 0 OD and B; Q1 Band D; Q2 Q₂ Q₁ Refer to figure above. If a negative externality exists, then the external costs associated with the negative externality equal the distance between points and the socially optimal output is A and B; Q2 A Cand B; Q2 Quantity

Economics (MindTap Course List)
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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Price, Cost P4 Ps P₂ P₁ Q₂ Q₁ Quantity Refer to figure above. If a negative externality exists, then the external costs associated with the negative externality equal the distance between points and the socially optimal output is D and B; Q1 B and D; Q2 A and B; Q2 Cand B; Q2
Transcribed Image Text:Price, Cost P4 Ps P₂ P₁ Q₂ Q₁ Quantity Refer to figure above. If a negative externality exists, then the external costs associated with the negative externality equal the distance between points and the socially optimal output is D and B; Q1 B and D; Q2 A and B; Q2 Cand B; Q2
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