Refer to the information provided in Figure 16.2 below to answer the question(s) that follow. Figure 16.2
-Refer to Figure 16.2. The marginal damage cost imposed as a result of producing automobiles is
A) $5.00 per car.
B) $10.00 per car.
C) $15.00 per car.
D) indeterminate from this information.

Question

Refer to the information provided in Figure 16.2 below to answer the question(s) that follow.  Figure 16.2
-Refer to Figure 16.2. The marginal damage cost imposed as a result of producing automobiles is
A) $5.00 per car. 
B) $10.00 per car. 
C) $15.00 per car. 
D) indeterminate from this information.

Quizplus · Accepted Answer

Based on the graph in Figure 16.2, at the current level of automobile production (6000 cars), the marginal damage cost is $10 per car. Therefore, in order to minimize the total social cost of producing automobiles, the best choice would be to reduce production to 5000 cars.

Refer to the Information Provided in Figure 16