Figure 5.4
-In Figure 5.4,if the marginal damages line did not originate at 0,

Question

Quizplus · Accepted Answer

The marginal damages line corresponds to the additional cost imposed on society for every unit of production. If this line did not originate at 0, it would mean that there is a cost to society even when no production occurs, which is not plausible. Therefore, the MSC would not originate at the same intercept as MPC. A and B are incorrect because marginal damages must exist (even if they start at 0), and MSC can still be found by adding MPC and marginal damages.

Figure 5.4 -In Figure 5.4,if the Marginal Damages Line Did Not Originate