Consider a Competitive Market with a MPB = 22 -

question 1

Multiple Choice

Consider a competitive market with a MPB = 22 - q and a MPC = 10 +q.There is a negative production externality of e = q, where q is the level of output in the market.Which statement is true?

• A)The DWL in the market outcome is $4.
• B)The DWL in the market outcome is $16.
• C)The DWL in the market outcome is $12.
• D)The DWL in the market outcome is $8.
• E)The DWL in the market outcome is $6.

---

Definitions:

London Dumping Convention

An international agreement aiming to control pollution of the sea by dumping and to encourage the disposal of waste on land.

Toxic Pollutants

Substances that are harmful or poisonous to living organisms and can cause damage to the environment or human health.

Radioactive Wastes

Hazardous waste materials that are radioactive and require special disposal methods to protect living beings and the environment.

Groundwater Pollution

The contamination of underground water sources, typically caused by human activities, leading to water that is unsafe for consumption and ecosystems.