7. Use the following table to answer these four questions:

a. What are the external costs per unit of output?

b. What level of output will be produced?

c. What level of output should be produced to achieve economic efficiency?

d. What is the value to society of correcting the externality?

Quantity Marginal Costs

(MC)

Marginal Social Costs (MSC)

Marginal Revenue

(MR)

1 $2 $4 $1 2

3 4

2 4 6 10 6 8 8 8

10 6

5 10 12 4