The private marginal benefit of a product's consumption is PMB = 200 - 2Q, and the private marginal cost of its production is PMC = 2Q. The production causes a negative externality, and the government imposes a $400 tax in an effort to internalize the externality. What is the marginal external damage of this good's production? O $50 $100 $200 $400
The private marginal benefit of a product's consumption is PMB = 200 - 2Q, and the private marginal cost of its production is PMC = 2Q. The production causes a negative externality, and the government imposes a $400 tax in an effort to internalize the externality. What is the marginal external damage of this good's production? O $50 $100 $200 $400
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section10.1: Externalities And Market Inefficiency
Problem 1QQ
Related questions
Question
![The private marginal benefit of a product's consumption is PMB = 200 - 2Q, and the private marginal cost of its production is PMC
= 2Q. The production causes a negative externality, and the government imposes a $400 tax in an effort to internalize the
externality. What is the marginal external damage of this good's production?
$50
$100
$200
$400](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7c7e35d7-8fc4-4626-a0ea-0884aaacb628%2Fa52135f6-256a-4f84-82b6-53582d360f5b%2F95kvvs9_processed.png&w=3840&q=75)
Transcribed Image Text:The private marginal benefit of a product's consumption is PMB = 200 - 2Q, and the private marginal cost of its production is PMC
= 2Q. The production causes a negative externality, and the government imposes a $400 tax in an effort to internalize the
externality. What is the marginal external damage of this good's production?
$50
$100
$200
$400
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Microeconomics](https://www.bartleby.com/isbn_cover_images/9781305156050/9781305156050_smallCoverImage.gif)
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Microeconomics](https://www.bartleby.com/isbn_cover_images/9781305156050/9781305156050_smallCoverImage.gif)
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Microeconomics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305971493/9781305971493_smallCoverImage.gif)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Economics, 7th Edition (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781285165875/9781285165875_smallCoverImage.gif)
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning