The figure below shows demand and supply for steel in a steel-exporting country. The solid red and green lines show, respectively, the marginalprivatecost and domestic demand for steel. The dashed red and green lines show, respectively, the marginalsocial costof steel production and the sum of domestic and export demand for steel.

Domestic + export Price, Domestic demand MC demand Marginal 110 100 social cost 90 Marginal ... ........ 75 private cost 68 50 80 100 125 145 Steel production