Scenario 10-1 The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward, The production of the 1,000 gallon of gasoline entails the followinga private cost of $3.10a social cost of $3-55a value to consumers of 83-70Refer to Seenario 10-1. From the given information, it is apparent thatO a the production of gasoline involves a negative xternality, so the market will produce a smaler quantity of gasoline than is socially desirable.O b. the production of gasoline involves a positive esternality, so the market will produce a smaller quantity of gasoline than is socially desirableO c he production of gasoline invalves a posve externality, so the market will produce a larger quantity of gasoline than is socially desiratie.Od the production of gasatine imolves a negative extemality, se the market will produce a larger quantity of ganolne than is socially desirable.

Given scenario:- The demand curve for the gasoline slopes downward and the supply curve for gasoline…

Scenario 10-1 The demnd curve for ganoline slopes dowward and the supply curve for gasoline skopes uprard. The production of the 1,000 palon of ganeline entals the following a private cost of $3.10 a social cost of $3-55 . a value to consumers of $3-70 efer to Seenario 10-1 From the given information, it is apparent that a the production of gasoline involves anegative ptemaity, so the market will produce asmaler quanity of ganoline than is socially desiable O the production of gasoline imolves a positive externaliny, so the market will produce a maler quantity of ganoline than is socially desirable Ocoeproduction of gsolne invalves a positive externality, so the market will produce a larger quanoty of gaolne than is socially desiratie. O4 he production of gasoline inolves a negative etemalty, se the market wil produce a larger quartty of ganolne than is socialy desrable

Scenario 10-1 The demnd curve for ganoline slopes dowward and the supply curve for gasoline skopes uprard. The production of the 1,000 palon of ganeline entals the following a private cost of $3.10 a social cost of $3-55 . a value to consumers of $3-70 efer to Seenario 10-1 From the given information, it is apparent that a the production of gasoline involves anegative ptemaity, so the market will produce asmaler quanity of ganoline than is socially desiable O the production of gasoline imolves a positive externaliny, so the market will produce a maler quantity of ganoline than is socially desirable Ocoeproduction of gsolne invalves a positive externality, so the market will produce a larger quanoty of gaolne than is socially desiratie. O4 he production of gasoline inolves a negative etemalty, se the market wil produce a larger quartty of ganolne than is socialy desrable

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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