Use the graph to determine the quantity of pesticide produced if the town owns the lake. Draw a point to show marginal social cost if production is 80 tonnes. Label it 1. Draw the MSC curve and label it. Draw a point to show the quantity of pesticide produced and the marginal social cost at this point when residents own the lake. Label it 2. Draw a point to show the marginal private cost of producing the efficient quantity. Label it 3. The town charges the factories $ a tonne to dump waste.

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