The graph below presents a standard negative externality, where each unit of production creates external costs of Ex. By moving from the market equilibrium to the socially optimal quantity of ____________, the net benefits to society would be equal to the area. $

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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The graph below presents a standard negative externality, where each unit
of production creates external costs of Ex. By moving from the market
equilibrium to the socially optimal quantity of ___________, the net benefits to
society would be equal to the area
PM
H
C :F
B
ד :ח
A
:E
D
MCS=MCM+Ex
G E=$9
Q₂
SM-MCM
DM
Q
Transcribed Image Text:The graph below presents a standard negative externality, where each unit of production creates external costs of Ex. By moving from the market equilibrium to the socially optimal quantity of ___________, the net benefits to society would be equal to the area PM H C :F B ד :ח A :E D MCS=MCM+Ex G E=$9 Q₂ SM-MCM DM Q
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