Figure 11-11 Companies producing toilet paper bleach the paper to make it white. The bleach is discharged into rivers and lakes and causes substantial environmental damage. Figure 11-11 illustrates the situation in the toilet paper market.
-Refer to Figure 11-11.The efficient output is

Question

Figure 11-11  Companies producing toilet paper bleach the paper to make it white. The bleach is discharged into rivers and lakes and causes substantial environmental damage. Figure 11-11 illustrates the situation in the toilet paper market.
-Refer to Figure 11-11.The efficient output is

Quizplus · Accepted Answer

The efficient output is where marginal cost (MC) intersects with demand (D), which is at point B12S1U1. At this point, the market achieves the maximum social welfare by producing the optimal level of toilet paper without causing substantial environmental damage from excessive bleaching. Thus, the firms producing toilet paper should produce at output level Q₂.

Figure 11-11 Companies Producing Toilet Paper Bleach the Paper