Figure 4-18
Suppose there are several paper mills producing paper for a market. These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river. The waste material affects the number of fish in the river and the use of the river for recreation and as a public water supply source. Figure 4-18 shows the paper market. Use this Figure to answer the following question(s).
-Refer to Figure 4-18.What does S₂ represent?

Question

Figure 4-18
  Suppose there are several paper mills producing paper for a market. These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river. The waste material affects the number of fish in the river and the use of the river for recreation and as a public water supply source. Figure 4-18 shows the paper market. Use this Figure to answer the following question(s).
-Refer to Figure 4-18.What does S₂ represent?

Quizplus · Accepted Answer

S₂ represents the market supply curve that reflects social cost, which includes both private and external costs.

Figure 4-18 Suppose There Are Several Paper Mills Producing Paper