In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
In the figure,
D: Demand curve for automobiles
S₁: Supply curve of automobiles prior to regulation
S₂: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-According to Figure 14.2, the total clean up cost for the society prior to regulation is the:

Question

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2

In the figure,
D: Demand curve for automobiles
S₁: Supply curve of automobiles prior to regulation
S₂: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-According to Figure 14.2, the total clean up cost for the society prior to regulation is the:

Quizplus · Accepted Answer

The total clean up cost for the society prior to regulation is represented by the area 0FGQ₁, which is the triangle formed by the intersection of the demand curve, the supply curve prior to regulation, and the marginal cost curve (represented by the clean up cost per unit). Therefore, the correct choice is C.

In the Following Figure, the First Panel Shows a Market