**Graph Explanation:**The graph represents the relationships between price and quantity in a market, showing Supply, Demand, and Social Cost curves.- **X-axis (Horizontal):** Represents Quantity, labeled with Q1, Q2, Q3, and Q4.- **Y-axis (Vertical):** Represents Price.**Curves:**1. **Supply Curve:** Upward sloping from left to right, indicating that as the price increases, the quantity supplied increases.2. **Demand Curve:** Downward sloping from left to right, indicating that as the price decreases, the quantity demanded increases.3. **Social Cost Curve:** Parallel and above the Supply Curve, indicating the additional costs to society that are not captured by the market price.**Intersection Points:**- The Supply and Demand curves intersect between Q2 and Q3, indicating the market equilibrium without considering external costs.- The Social Cost curve intersects the Demand curve at Q1, indicating the socially optimal level of output when external costs are internalized.**Question:**Refer to Figure 10-2. If all external costs were internalized, then the market's output would be:- a. Q4.- b. Q2.- c. Q3.- d. Q1.

* ANSWER :- * The market output is = Q2. So the answer is OPTION b

Answered: Social Cost Supply Demand Q. QUANTITY…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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None
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Hand written solutions are strictly prohibited
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Social Cost Supply Demand Q. QUANTITY Refer to Figure 10-2. If all external costs were internalized, then the market's output would be a. Q4. b. Q2- O c. Q3. PRICE