Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $210 per ton.ⒸPRICE (Dollars per ton of bolts)8 3 3 2 2 2 2 2 26005404804203603002401801206000O12M"5QUANTITY (Tons of bolts)D6Supply(Private Cost)Demand(Private Value)Social CostThe market equilibrium quantity is tons of bolts, but the socially optimal quantity of boit production istons. 5. The effect of external costs on the efficient levelConsider the market for bolts. Suppose that a hardware factory dumps toxic waste into a nearby river, creating a negative externality for those livingdownstream from the factory. Producing an additional ton of bolts imposes a constant external cost of $210 per ton. The following graph shows thedemand (private value) curve and the supply (private cost) curve for bolts.Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $210 per ton.PRICE (Dollars per ton of bolts)60054048042036030024015012060001nLG35QUANTITY (Tons of bolts)06Supply(Private Cost)Demand(Private Value)Social Cost

Negative externalities or external costs are harmful side effects arise out of production or…

Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $210 per ton. PRICE (Dollars per ton of bolts) 600 540 480 420 360 300 240 180 120 60 0 O 2 Q 3 5 QUANTITY (Tons of bolts) The market equilibrium quantity is Supply (Private Cost) Demand (Private Value) Social Cost tons of bolts, but the socially optimal quantity of boit production is tons.