The reduction in damages to the environment from changing output from Q_C to Q_E is A) EH B) DG C) DEHG D) DGH

Question

Quizplus · Accepted Answer

To determine the reduction in environmental damage, we need to look at the vertical distance between the initial quantity supplied (Q_C) and the final quantity supplied (Q_E) at the social cost curve (SC). From the graph, we can see that the vertical distance between Q_C and Q_E at SC is represented by the four segments DE, EH, HG, and GD. Therefore, the reduction in environmental damage is equal to the sum of these segments: DE + EH + HG + GD. Hence, the best choice(s) are C) DEHG as they represent the total reduction in environmental damage.

The Reduction in Damages to the Environment from Changing Output