A nation\'s government has determine that mass transmit, such as bus lines, help

Question

A nation's government has determine that mass transmit, such as bus lines, helps alleviate traffic congestion, thereby benefiting both individual auto commuters and companies that desire to move products and factors of production speedily along streets and highways. Nevertheless, even though several private bus lines are in service, commuters in the city are failing to take the social benefits of the use of mass transit into account. The figure to the right shows the market demand and market supply curves for bus rides. Using the line drawing tool, determine how the market's outcome with respect to output would be impacted if commuters did take into account the social benefits associated with bus ridership. Properly label this line. Using the point drawing tool, indicate the new equilibrium point. Label the point 'E2' Carefully follow the instructions above, and only draw the required objects.

Explanation / Answer

1. draw the another demand curve above the blue line that is parallel to the blue line

2. new equlibrium point is where this new line intersects with the supply curve(red line)

C. An increase in negative externality caused by smoking

Increase the price of pesticides

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