Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

With the help of the graph, it is observed that the marginal private benefit of the good is $95 and, due to a positive

image

With the help of the graph, it is observed that the marginal private benefit of the good is $95 and, due to a positive externality, the marginal benefit to society is $125. In this case, the marginal external benefit created by the positive externality is $. In the graph, The deadweight loss represents a deadweight loss. the foregone benefit to society of the externality. Positive externality will occur when O A. the marginal social benefit O B. the marginal social benefit is equal to deadweight loss OC. the marginal social benefit is greater than the marginal cost to produce at the market equilibrium O D. the marginal social benefit is equal to marginal social cost to produce at the market equilibrium Which of the following statements is true regarding pecuniary externalities? equal to marginal private benefit OA. It is a branch of the negative externality. OB. It causes market inefficiencies. OC. It leads to wrong equilibrium quantities. OD. It affects other people only through market price. Prices (in dollars) 150- 140- 130- 125 120- 110- 100- 35 80- 70- 60- 50 Graph B. D Qmarket Qoptimal Quantity S MSB

Step by Step Solution

3.41 Rating (154 Votes )

There are 3 Steps involved in it

Step: 1

Marginal external benefit created by positive externalityMB to society MPB Mar... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics

Authors: R. Glenn Hubbard

6th edition

978-0134797731, 134797736, 978-0134106243

More Books

Students also viewed these Economics questions

Question

What is a virtual private network? Why is it called virtual?

Answered: 1 week ago

Question

Can a sole proprietorship be described as a pass-through entity?

Answered: 1 week ago

Question

How can sensitivity to pain be altered?

Answered: 1 week ago