Consider a Competitive Market in Which the MPB = 180

question 8

Multiple Choice

Consider a competitive market in which the MPB = 180 - 2q and the MSC = q.In this market, however, there is a positive consumption externality of $60 per unit consumed.What is the DWL that results in the market equilibrium?

• A)$200
• B)$600
• C)$400
• D)$500
• E)$0

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Definitions:

Flow-Banded Rhyolite

A type of volcanic rock characterized by bands of alternating texture or color, formed by the flow of viscous silicate lava.

Viscous Lava

Lava that has a high viscosity, meaning it flows slowly due to its thick, sticky consistency.

Lateral Blast

A volcanic eruption characterized by the powerful, horizontal expulsion of ash, gas, and volcanic debris, often occurring with little to no warning.

Mount St. Helens

An active stratovolcano located in Washington State, USA, famous for its catastrophic eruption on May 18, 1980.