The graph illustrates the unregulated market for pesticide. When the factories produce pesticide, they also create waste which they dump into a lake on the outskirts of a small town. The marginal external cost of the dumped waste is equal to the marginal private cost of producing pesticide (that is, the marginal social cost of producing the pesticide is double the marginal private cost). What is the quantity of pesticide produced if no one owns the lake and what is the efficient quantity of pesticide? What is the deadweight loss? If no one owns the lake, the quantity of pesticide produced is tons a week. 630- 540 450- 360- 270 180- 90- 0 Price (dollars per ton) S D 15 30 45 60 75 90 105 120 135 150 Quantity (tons of pesticide per week) Q

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Chapter1: Making Economics Decisions
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The graph illustrates the unregulated market for pesticide.
When the factories produce pesticide, they also create
waste which they dump into a lake on the outskirts of a
small town. The marginal external cost of the dumped
waste is equal to the marginal private cost of producing
pesticide (that is, the marginal social cost of producing the
pesticide is double the marginal private cost). What is the
quantity of pesticide produced if no one owns the lake and
what is the efficient quantity of pesticide? What is the
deadweight loss? If no one owns the lake, the quantity of
pesticide produced is tons a week.
Transcribed Image Text:The graph illustrates the unregulated market for pesticide. When the factories produce pesticide, they also create waste which they dump into a lake on the outskirts of a small town. The marginal external cost of the dumped waste is equal to the marginal private cost of producing pesticide (that is, the marginal social cost of producing the pesticide is double the marginal private cost). What is the quantity of pesticide produced if no one owns the lake and what is the efficient quantity of pesticide? What is the deadweight loss? If no one owns the lake, the quantity of pesticide produced is tons a week.
The graph illustrates the unregulated market for pesticide.
When the factories produce pesticide, they also create waste which they dump into
a lake on the outskirts of a small town.
The marginal external cost of the dumped waste is equal to the marginal private cost of producing
pesticide (that is, the marginal social cost of producing the pesticide is double the marginal private cost).
What is the quantity of pesticide produced if no one owns the lake and what is the efficient quantity of
pesticide?
What is the deadweight loss?
If no one owns the lake, the quantity of pesticide produced is tons a week.
630-
540-
450-
360-
270-
180-
90-
0-
0
Price (dollars per ton)
S
D
15 30 45 60 75 90 105 120 135 150
Quantity (tons of pesticide per week)
Transcribed Image Text:The graph illustrates the unregulated market for pesticide. When the factories produce pesticide, they also create waste which they dump into a lake on the outskirts of a small town. The marginal external cost of the dumped waste is equal to the marginal private cost of producing pesticide (that is, the marginal social cost of producing the pesticide is double the marginal private cost). What is the quantity of pesticide produced if no one owns the lake and what is the efficient quantity of pesticide? What is the deadweight loss? If no one owns the lake, the quantity of pesticide produced is tons a week. 630- 540- 450- 360- 270- 180- 90- 0- 0 Price (dollars per ton) S D 15 30 45 60 75 90 105 120 135 150 Quantity (tons of pesticide per week)
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