-The figure above illustrates the problem of overcrowding and external costs experienced during the summer months in a national park. If the market is unregulated, in equilibrium the external cost of visiting the national park is given by the distance between

Question

Quizplus · Accepted Answer

The external cost of visiting the national park is the difference between the private cost and the social cost. The private cost is the cost that the visitor pays to enter the park, while the social cost is the cost that the visitor imposes on others by visiting the park. In this case, the external cost is the cost of overcrowding and pollution. The distance between points F and G represents the difference between the private cost and the social cost, so it is the external cost.

-The Figure Above Illustrates the Problem of Overcrowding and External