-The figure above shows the market for transportation services, which produces an external cost due to the air pollution that is created. The efficient quantity of transportation services is ________ and the corresponding price is ________.
A) 120; $14
B) 120; $8
C) 80; $12
D) 80; $6

Question

-The figure above shows the market for transportation services, which produces an external cost due to the air pollution that is created. The efficient quantity of transportation services is ________ and the corresponding price is ________.
A) 120; $14 
B) 120; $8 
C) 80; $12 
D) 80; $6

Quizplus · Accepted Answer

The efficient quantity and price account for external costs. The efficient quantity is where the social cost curve intersects the demand curve, which is at 80 units and a price of $12.

-The Figure Above Shows the Market for Transportation Services, Which