A paper mill discharges chemicals into a river which pollutes the shores of a downstream resort area.The private marginal cost,social marginal cost,and marginal benefit associated with the production of paper are given by the following equations: MCP = 5 + Q
MCS = 10 + 2Q
MB = 35 - 0.5Q.
The marginal external cost at the allocatively efficient level of output is
A) 0.
B) 5.
C) 10.
D) 15.
E) 20.
Correct Answer:
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