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7. The demand for steel in the economy is P:]3-Q. However, the smoke generated by the production of steel causes health problems and has a
7. The demand for steel in the economy is P:]3-Q. However, the smoke generated by the production of steel causes health problems and has a $4 per ton cost on the villager's health. The mau'ginal cost of production for steel is $5 per ton. If the competitive steel mills are left alone to produce, and not taxed for the smoke, what is the deadweight loss caused by over production? a) O b) 4 e) 6 d) 8 e) 10
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