Price Social cost $14.00 Supply 10.50 9.00 7.00 5.50 4.50 1.00 Demand 600 800 Quantity A market equilibrium that does not take into account the external costs has a deadweight loss of: a. $2,800. b. $1,500. c. $700. d. $350.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 41P: Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once...
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Figure: Social Costs
Price
Social cost
$14.00
Supply
10.50
9.00
7.00
5.50
4.50
1.00
Demand
600 800
Quantity
A market equilibrium that does not take into account the external costs has a deadweight loss of:
a. $2,800.
b. $1,500.
c. $700.
d. $350.
Transcribed Image Text:Figure: Social Costs Price Social cost $14.00 Supply 10.50 9.00 7.00 5.50 4.50 1.00 Demand 600 800 Quantity A market equilibrium that does not take into account the external costs has a deadweight loss of: a. $2,800. b. $1,500. c. $700. d. $350.
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