(Figure: Nail Polish Externalities) Based on the figure, Sp (MPC) represents the private supply curve of a particular type of nail polish, the manufacture of which is associated with the release of toxic chemicals into the atmosphere. SS (MSC) includes the cost of that toxicity borne by others. What area represents the total external cost of this nail polish?
A) abdc
B) abef
C) defc
D) The total external cost is unknown.
Correct Answer:
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