-The figure above shows the market for transportation services, which produces an external cost due to the air pollution that is created. If the market for transportation services is competitive and unregulated, the equilibrium quantity is ________ and the equilibrium price is ________.
A) 120; $14
B) 120; $8
C) 80; $12
D) 80; $6

Question

-The figure above shows the market for transportation services, which produces an external cost due to the air pollution that is created. If the market for transportation services is competitive and unregulated, the equilibrium quantity is ________ and the equilibrium price is ________.
A) 120; $14 
B) 120; $8 
C) 80; $12 
D) 80; $6

Quizplus · Accepted Answer

In a competitive and unregulated market, the equilibrium is determined by the intersection of the supply and demand curves without considering external costs. Therefore, the equilibrium quantity is 120 and the equilibrium price is $8.

-The Figure Above Shows the Market for Transportation Services, Which