A paper mill discharges chemicals into a river which washes the shores of a downstream resort area. The private cost, social cost, and marginal benefit associated with the production of paper are given by the following equations: PMC = 5 + Q, SMC = 10 + 2Q, and MB = 35 - 0.5Q. A competitive free market will produce output of units, and this amount is than the allocatively efficient level of output.

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The Answer of A paper mill discharges chemicals into a river which washes the shores of a downstream resort area. The private cost, social cost, and marginal benefit associated with the production of paper are given by the following equations: PMC = 5 + Q, SMC = 10 + 2Q, and MB = 35 - 0.5Q. A competitive free market will produce output of units, and this amount is than the allocatively efficient level of output.

A Paper Mill Discharges Chemicals into a River Which Washes