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Economic efficiency and externality related problem

Assignment Help Macroeconomics
Reference no: EM1311671

(External Costs) Use the data in the table to the right to answer the following questions.

a. What is the external cost per unit of production?

b. What level is produced if there is no regulation of the externality?

c. What level should be produced to achieve economic efficiency?

d. Calculate the dollar value of the net gain to society from correcting the externality.

Quantity

Marginal     Private Benefit (demand)

Marginal  Private Cost(supply)

Marginal

Social

Cost

0

--

$0

$0

1

$10

2

4

2

9

3

5

3

8

4

6

4

7

5

7

5

6

6

8

6

5

7

9

7

4

8

10

8

3

9

11

9

2

10

12

10

1

11

13

Reference no: EM1311671

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