A Negative Externality Problem

question 43

Multiple Choice

A Negative Externality Problem

Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation.


-Refer to A Negative Externality Problem.Absent any intervention,the competitive market will produce

• A) 40 units.
• B) 45 units.
• C) 55 units.
• D) 60 units

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