(Figure: Market for Bathroom Cleaner) The figure shows amarket for cans of bathroom cleaner that causesenvironmental damage, imposing costs on people other thanthe consumers and producers of the cleaner. What is theefficient quantity in this market?

Question

Quizplus · Accepted Answer

The efficient quantity is where socially optimal quantity intersects demand curve which is at 85 cans of bathroom cleaner. At this quantity, the marginal benefit equals the marginal cost, and the total surplus is maximized. Therefore, the best choice is to produce and sell 85 cans of bathroom cleaner.

(Figure: Market for Bathroom Cleaner) the Figure Shows Amarket for Cans