Refer to Scenario 16.1 below to answer the questions that follow.
SCENARIO 16.1: The marginal benefit for a particular food is described by MB = 30 - q,
where q refers to the quantity of the food. The marginal cost of producing the food is described by MC = 2q. There is a negative externality associated with food production and the marginal social cost of food production is MSC = 4q.
-Refer to Scenario 16.1. The marginal damage cost is ________.

Question

Quizplus · Accepted Answer

The marginal damage cost (MDC) is the difference between the marginal social cost (MSC) and the marginal private cost (MC). Given MSC = 4q and MC = 2q, MDC = MSC - MC = 4q - 2q = 2q.