If a ton of newspaper costs $350 to produce and in the process causes $10 worth of pollution damage to the environment,then ________.
A) the private cost is $360 per ton
B) the social cost is $10 per ton and the private cost is $350 per ton
C) the private cost is $360 per ton and the social cost is $340 per ton
D) the social cost is $360 per ton and the private cost is $350 per ton

Question

Quizplus · Accepted Answer

The private cost is the cost to the producer to produce the newspaper, which is $350 per ton. The social cost includes the private cost plus the cost of pollution damage, which is $10 per ton. Therefore, the social cost is $360 per ton and the private cost is $350 per ton. Choice D correctly identifies these costs.

If a Ton of Newspaper Costs $350 to Produce and in the Process