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Answer to question #5 but I need help with question #6 both questions attached. The socially optimum level of output is 500 units of paper,
Answer to question #5 but I need help with question #6 both questions attached.
The socially optimum level of output is 500 units of paper, but if left unregulated the factory will instead produce 600 units of paper.
Explanation:
The social optimum level will be the level at which private value is equal to social cost and that level is of 500 units. If eft unregulated, the factory will not consider external cost, it means the level at which private value is equal to private cost will be considered that is 600 units.
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