The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below.

The equilibrium price and quantity when social costs are taken into account are
A) Price = $55, Quantity = 30
B) Price = $40, Quantity = 55
C) Price = $30, Quantity = 20
D) Price = $30, Quantity = 80

Question

The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below.

The equilibrium price and quantity when social costs are taken into account are
A) Price = $55, Quantity = 30 
B) Price = $40, Quantity = 55 
C) Price = $30, Quantity = 20 
D) Price = $30, Quantity = 80

Quizplus · Accepted Answer

The Answer of The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below.

The equilibrium price and quantity when social costs are taken into account are
A) Price = $55, Quantity = 30 
B) Price = $40, Quantity = 55 
C) Price = $30, Quantity = 20 
D) Price = $30, Quantity = 80

The Supply and Demand Conditions Facing a Firm That Makes