consider the market for steel suppose that a steel manufacturing plant dumps tox

Question

consider the market for steel suppose that a steel manufacturing plant dumps toxic waste into a nearby river creating a negative 2. The effect of negative externalities on the optimal quantity of consumption Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional tonne of steel imposes a constant external cost of $385 per tonne. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to plot the soclal cost curve when the external cost is $38S per tonne. 1100 T Social Cost D Supply Private Cost) Demand Private Value) MacBook Air

Explanation / Answer

Market equilibrium quantity is - 3.5

5.5

Government should impose Subsidy to encourage production

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.