The following table shows the marginal private cost (MPC)and the marginal social cost (MSC)of a chemical factory.
Answer the following questions:
(1)What is the marginal cost of the factory's externality? Is it constant at all quantities?
(2)If the factory is a perfectly competitive firm and is not required by the government to internalize its external cost,how many tons should the factory produce,given that the market price of a ton of chemicals is $130?
(3)If the factory is a perfectly competitive firm and is required by the government to internalize its external cost,how many tons should the factory produce,given that the market price of a ton of chemicals is $130?
(4)Draw a graph illustrating your answers.

Question

The following table shows the marginal private cost (MPC)and the marginal social cost (MSC)of a chemical factory.
  Answer the following questions:
(1)What is the marginal cost of the factory's externality? Is it constant at all quantities?
(2)If the factory is a perfectly competitive firm and is not required by the government to internalize its external cost,how many tons should the factory produce,given that the market price of a ton of chemicals is $130?
(3)If the factory is a perfectly competitive firm and is required by the government to internalize its external cost,how many tons should the factory produce,given that the market price of a ton of chemicals is $130?
(4)Draw a graph illustrating your answers.

Quizplus · Accepted Answer

The Answer of The following table shows the marginal private cost (MPC)and the marginal social cost (MSC)of a chemical factory.
  Answer the following questions:
(1)What is the marginal cost of the factory's externality? Is it constant at all quantities?
(2)If the factory is a perfectly competitive firm and is not required by the government to internalize its external cost,how many tons should the factory produce,given that the market price of a ton of chemicals is $130?
(3)If the factory is a perfectly competitive firm and is required by the government to internalize its external cost,how many tons should the factory produce,given that the market price of a ton of chemicals is $130?
(4)Draw a graph illustrating your answers.

The Following Table Shows the Marginal Private Cost (MPC)and the Marginal