-The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city.If the marginal external cost is $10 per ton at every quantity of steel produced,the equilibrium quantity when the steel industry is unregulated is ________ tons per week.
A) 5
B) 15
C) 20
D) 25
E) 10

Question

-The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city.If the marginal external cost is $10 per ton at every quantity of steel produced,the equilibrium quantity when the steel industry is unregulated is ________ tons per week.
A) 5 
B) 15 
C) 20 
D) 25 
E) 10

Quizplus · Accepted Answer

The equilibrium quantity when the steel industry is unregulated is determined by the intersection of the supply and demand curves, ignoring the external costs. The marginal external cost does not affect the equilibrium quantity in an unregulated market because it is not considered by the private market participants.

-The Table Above Shows Information About the Costs and Benefits