Figure 11-4 Figure 11-4 shows a market with a negative externality.
-Refer to Figure 11-4.The size of marginal external costs can be determined by

Question

Figure 11-4  Figure 11-4 shows a market with a negative externality.
-Refer to Figure 11-4.The size of marginal external costs can be determined by

Quizplus · Accepted Answer

The size of marginal external costs can be determined by subtracting the marginal private cost (the supply curve) from the marginal social cost (the full cost including externalities), which is represented by the vertical distance between the two supply curves S₂ and S₁ at each output level. Therefore, the correct choice is B.

Figure 11-4 Figure 11-4 Shows a Market with a Negative