Exhibit 30-1

Refer to Exhibit 30-l. If the exhibit represents a negative externality situation, the benefit of expanding output from Q₂ to Q₁ is the area of

Question

Exhibit 30-1 Refer to Exhibit 30-l. If the exhibit represents a negative externality situation, the benefit of expanding output from Q₂ to Q₁ is the area of

Quizplus · Accepted Answer

The benefit of expanding output from Q₂ to Q₁ is represented by the area of Q₂BAQ₁, which is the increase in consumer surplus resulting from the expanded output. The area of ABC represents the cost of the negative externality, but it is not the benefit of expanding output. The area of Q₂BCQ₁ represents both the benefit and cost of the expanded output, but the question asks specifically for the benefit. The area of Q₂EAQ₁ represents the change in producer surplus, not the benefit to society as a whole.

Exhibit 30-1 ​ Refer to Exhibit 30-L. If the Exhibit Represents a Negative

Exhibit 30-1 Refer to Exhibit 30-L. If the Exhibit Represents a Negative