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Write a post describing a real-world example of a negativeexternality. Be specific about the difference between the private and social cost associated with the activity
Write a post describing a real-world example of a negativeexternality.
- Be specific about the difference between the private and social cost associated with the activity that creates theexternality.
- Describe how the difference between social and private costs impacts the amount of the good/activity provided in equilibrium.
- Relative to the social optimum, is there too much or too little of the good provided in equilibrium?
- Provide your best guess of the size of theexternality(in terms of dollars)?
- How can the government "fix" the problem created by theexternality(achieve the social optimum in equilibrium)?
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