Companies producing toilet paper bleach the paper to make it white. The bleach is discharged into rivers and lakes and causes substantial environmental damage. Figure 5-9 illustrates the situation in the toilet paper market.
-Refer to Figure 5-9. The efficient output is

Question

Quizplus · Accepted Answer

The efficient output is typically where marginal cost (MC) equals marginal benefit (MB) or demand. Without seeing Figure 5-9, the principle of economic efficiency is that it occurs at the output level where the additional cost of producing one more unit (MC) is exactly equal to the additional benefit or value that unit brings (MB or the price that consumers are willing to pay). Q2 is chosen as the correct answer based on this principle, assuming it represents this equilibrium point in the context of the question.

Companies Producing Toilet Paper Bleach the Paper to Make It