Scenario: The following figure shows the private cost and social cost of producing Good X. Firm A is the producer of Good X. The production plant and Bob's house are located next to a river. However, the plant is upstream, and Bob's house is downstream. Since production pollutes the river, Bob suffers from a negative externality.

-Refer to the scenario above.What is the value of the negative externality imposed on Bob when the firm produces to maximize its private net benefits?
A) (b d) e
B) (a c) f
C) d e
D) c f

Question

Scenario: The following figure shows the private cost and social cost of producing Good X. Firm A is the producer of Good X. The production plant and Bob's house are located next to a river. However, the plant is upstream, and Bob's house is downstream. Since production pollutes the river, Bob suffers from a negative externality.
 
-Refer to the scenario above.What is the value of the negative externality imposed on Bob when the firm produces to maximize its private net benefits?
A) (b d) e 
B) (a c) f 
C) d e 
D) c f

Quizplus · Accepted Answer

The Answer of Scenario: The following figure shows the private cost and social cost of producing Good X. Firm A is the producer of Good X. The production plant and Bob's house are located next to a river. However, the plant is upstream, and Bob's house is downstream. Since production pollutes the river, Bob suffers from a negative externality.
 
-Refer to the scenario above.What is the value of the negative externality imposed on Bob when the firm produces to maximize its private net benefits?
A) (b d) e 
B) (a c) f 
C) d e 
D) c f

Scenario: the Following Figure Shows the Private Cost and Social