Figure 10-3

-Refer to Figure 10-3.How is the negative externality measured
A)P₂ - P₁
B)P₃ - P₂
C)P₃ - P₀
D)P₃ - P₁

Name: Figure 10-3 -Refer to Figure 10-3.How is the negative externality measured A)P₂ - P₁ B)P₃ - P₂ C)P₃ - P₀ D)P₃ - P₁
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Question

Figure 10-3
 
-Refer to Figure 10-3.How is the negative externality measured
A)P₂ - P₁ 
B)P₃ - P₂ 
C)P₃ - P₀ 
D)P₃ - P₁

Quizplus · Accepted Answer

The negative externality is measured as the difference between the market equilibrium price before the externality (P₁) and the market equilibrium price after the externality (P₃), so the correct choice is D.

Figure 10-3 -Refer to Figure 10-3.How Is the Negative Externality Measured