Figure 5-1
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 5-1 shows the paper market.Use this Figure to answer the following question(s) .
-Refer to Figure 5-1.Why is there a deadweight loss?
A) because the marginal social cost of producing each additional unit in excess of Q2 exceeds the marginal benefit
B) because the marginal private cost of producing each additional unit in excess of Q2 exceeds the marginal benefit
C) because the marginal social benefit of producing each additional unit in excess of Q2 exceeds the private cost
D) because the marginal private benefit of producing each additional unit in excess of Q2 exceeds the social cost
Correct Answer:
Verified
Q21: Figure 5-1 Q22: Figure 5-1 Q26: Figure 5-3 Q27: Figure 5-1 Q34: Which of the following would result in Q46: "A competitive market achieves economic efficiency by Q47: Medical research that ends in a cure Q52: When production generates a negative externality, the Q59: The social cost of cutting trees for Q70: When products that create positive externalities are Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents![]()
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