The graph below presents a standard negative externality, where each unit of production creates external costs of Ex. At the market equilibrium quantity of , the total external cost would be equal to the areas
The graph below presents a standard negative externality, where each unit of production creates external costs of Ex. At the market equilibrium quantity of , the total external cost would be equal to the areas
Chapter1: Making Economics Decisions
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the total external cost would be equal to the areas
$
PM
H
C
B
A
F
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MCS=MCM+Ex
E =$9
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Transcribed Image Text:The graph below presents a standard negative externality, where each unit of production creates external costs of Ex. At the market equilibrium quantity of
the total external cost would be equal to the areas
$
PM
H
C
B
A
F
D
la
MCS=MCM+Ex
E =$9
SM-MCM
M
Q
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