Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant incidental cost of $210 per ton. The following graph shows the demand (marginal private value) curve and the supply (marginal private cost) curve for steel. Use the purple points (diamond symbol) to plot the marginal social cost curve when the incidental cost is $210 per ton. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically, PRICE (Dollars per Son of steel) 7:00 630 560 400 420 350 280 210 140 70 O Q O D O B Marginal Social Cost D Supply (Marginal Private Cost) Demand (Marginal Private Benefit)
The Economics of the Environment and Natural Resources Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant incidental cost of $210 per ton. The following graph shows the
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