A Negative Externality Problem

Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation.

-Refer to A Negative Externality Problem.Absent any intervention,the competitive market will produce
A) 40 units.
B) 45 units.
C) 55 units.
D) 60 units

Question

A Negative Externality Problem

Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation.

-Refer to A Negative Externality Problem.Absent any intervention,the competitive market will produce
A) 40 units.
B) 45 units.
C) 55 units.
D) 60 units

Quizplus · Accepted Answer

The Answer of A Negative Externality Problem

Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation.

-Refer to A Negative Externality Problem.Absent any intervention,the competitive market will produce
A) 40 units.
B) 45 units.
C) 55 units.
D) 60 units