Figure 5-15 shows the market for Atlantic salmon,a common resource.The current market equilibrium output of Q1 is not the economically efficient output.The economically efficient output is Q2.
-Refer to Figure 5-15.The current market equilibrium output is partly the result of overfishing.In that case,what does S2 represent?

Question

Quizplus · Accepted Answer

S2 represents the social marginal cost of harvesting salmon, as it takes into account the negative externality of overfishing on the overall health and sustainability of the resource.

Figure 5-15 Shows the Market for Atlantic Salmon,a Common Resource