The following figure shows the market supply and demand of a good whose production entails a $2 negative externality per unit.

-Refer to the figure above.The socially optimal quantity of this good should be ________ units.

Question

The following figure shows the market supply and demand of a good whose production entails a $2 negative externality per unit.
 
-Refer to the figure above.The socially optimal quantity of this good should be ________ units.

Quizplus · Accepted Answer

The socially optimal quantity is where the marginal social benefit equals the marginal social cost. This occurs at a quantity of 60 units.

The Following Figure Shows the Market Supply and Demand of a Good