Figure 5-7
Figure 5-7 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 5-7.The current market equilibrium output is partly the result of overfishing.In that case,what does S₂ represent?

Question

Figure 5-7

Figure 5-7 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 5-7.The current market equilibrium output is partly the result of overfishing.In that case,what does S₂ represent?

Quizplus · Accepted Answer

S₂ represents the social marginal cost of harvesting salmon, which includes both private costs and external costs such as environmental damage from overfishing.

Figure 5-7 Figure 5-7 Shows the Market for Atlantic Salmon, a Atlantic