Figure 15.2 Figure 15.2 shows a market with a negative externality.
-Refer to Figure 15.2.What is the efficient output level?

Name: Figure 15.2 Figure 15.2 shows a market with a negative externality. -Refer to Figure 15.2.What is the efficient output level?
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Question

Figure 15.2  Figure 15.2 shows a market with a negative externality.
-Refer to Figure 15.2.What is the efficient output level?

Quizplus · Accepted Answer

The efficient output level is where the marginal social cost (MSC) equals the marginal social benefit (MSB). This occurs at point a where Q_{a intersects with}. This level of output maximizes the total welfare of society.

Figure 152 Figure 15