Refer to Figure 7.1, above. Because of a reduction in air pollution, a farmer has experienced a shift in the supply curve from S₁ to S₂. If price is p₁, one way of estimating the value of the reduced pollution in terms of increased production is ______________.

Question

Quizplus · Accepted Answer

The value of reduced pollution in terms of increased production can be estimated by the increase in quantity multiplied by the price, the difference in the areas under the supply curves before and after the shift, or simply the area representing the increase in production, which are all represented by the options given.