-The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, at the equilibrium level of output, the marginal external cost is
A) zero.
B) $10.
C) $20.
D) $30.

Question

-The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, at the equilibrium level of output, the marginal external cost is
A) zero. 
B) $10. 
C) $20. 
D) $30.

Quizplus · Accepted Answer

In a perfectly competitive and unregulated market, the equilibrium level of output occurs where marginal private cost equals marginal private benefit. The marginal external cost is the difference between the marginal social cost and the marginal private cost at this output level. Given the options, $20 is the marginal external cost at equilibrium.

-The Tables Above Show the Marginal Costs and Benefits from Production