Refer to the Figure above. In Panel (b), the increase in total cost of producing the original quantity of output at the new cost associated with increased environmental regulations would be A) p₂ x r₁_. B) (d + e + f). C) p₂ x r₂_. D) p₁x r₁_.

Question

Quizplus · Accepted Answer

The increase in total cost due to new environmental regulations is represented by the sum of areas under the new cost curve but above the original cost curve, which corresponds to the areas labeled d, e, and f.

Refer to the Figure Above