**Understanding Deadweight Loss Due to Pollution from Dry Cleaners***Question 43*: The fumes from dry cleaners contribute to air pollution. The deadweight loss associated with the private market equilibrium (assuming linearity) is:**Graph Explanation**:The graph plots the price per item (y-axis) against the quantity of items cleaned per week (x-axis). Three curves are represented:1. **Marginal Social Cost (MSC)**: This curve shows the cost to society, which includes the external costs of air pollution. It is higher than the Marginal Private Cost.2. **Marginal Private Cost (MPC)**: This curve represents the cost incurred by the dry cleaners, excluding the external costs of pollution.3. **Marginal Social Benefit (MSB)**: Reflects the benefit to society from cleaning items, equivalent to the demand curve.**Key Points Referenced**:- **Price Points**: $7.50, $7.25, and $7.15 are marked on the price axis.- **Quantity**: At 600,000 and 750,000 items cleaned per week are specific quantities referenced.**Options** for the deadweight loss:a. $70,000b. $35,000c. $52,500d. $26,250e. none of the above

A negative externality refers to a situation where the production or consumption of a certain good…

43. The fumes from dry cleaners contributes to air pollution. The deadweight loss associated with the private market equilibrium (assuming linearity) is: PRICE $/ITEM $7.50 $7.25 $7.15 a. $70,000 b. $35,000 c. $52,500 d. $26,250 e. none of the above 600,000 750,000 S=MARGINAL SOCIAL COST S= MARGINAL PRIVATE COST D= MARGINAL SOCIAL BENEFIT QUANTITY OF ITEMS CLEANED/WEEK

43. The fumes from dry cleaners contributes to air pollution. The deadweight loss associated with the private market equilibrium (assuming linearity) is: PRICE $/ITEM $7.50 $7.25 $7.15 a. $70,000 b. $35,000 c. $52,500 d. $26,250 e. none of the above 600,000 750,000 S=MARGINAL SOCIAL COST S= MARGINAL PRIVATE COST D= MARGINAL SOCIAL BENEFIT QUANTITY OF ITEMS CLEANED/WEEK

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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