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Figure: Dishwashing Detergent
-(Figure: Dishwashing Detergent) Refer to the figure. Dishwashing detergent contains phosphates that harm marine life. In this figure, the market equilibrium quantity is ______ units, and the efficient quantity is ______.
A) 6; 9
B) 12; 6
C) 9; 6
D) 12; 9

Question

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Figure: Dishwashing Detergent 
-(Figure: Dishwashing Detergent) Refer to the figure. Dishwashing detergent contains phosphates that harm marine life. In this figure, the market equilibrium quantity is ______ units, and the efficient quantity is ______.
A) 6; 9 
B) 12; 6 
C) 9; 6 
D) 12; 9

Quizplus · Accepted Answer

The figure shows a negative externality, as the production and consumption of dishwashing detergent leads to harm to marine life. The market equilibrium quantity is where the supply and demand curves intersect, at a quantity of 9 units. However, this quantity is not efficient, as it leads to the harm caused by the phosphates in the detergent. The efficient quantity is where the social cost (private cost + external cost) intersects with the demand curve, which is at a quantity of 6 units. Therefore, the best choice is C, with a market equilibrium quantity of 9 units and an efficient quantity of 6 units. This could be achieved through the implementation of government policies, such as taxes or regulations on the use of phosphates in dishwashing detergent.

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