Figure 11.4 Figure 11.4 shows a market with a negative externality.
-Refer to Figure 11.4.What price represents the marginal benefit of the last unit produced?

Question

Figure 11.4  Figure 11.4 shows a market with a negative externality.
-Refer to Figure 11.4.What price represents the marginal benefit of the last unit produced?

Quizplus · Accepted Answer

The marginal benefit of the last unit produced is represented by the point where the demand curve (U1B1) intersects with the marginal private cost curve (S1). In this case, that point is P_b. Therefore, the correct answer is B.

Figure 114 Figure 11